Why AMD Stock Popped on Monday

AMD jumped 3.6% Monday after TD Cowen analyst Joshua Buchalter reiterated a buy rating with a $675 price target.

Buchalter pointed to rising adoption of agentic AI and production inference workloads. His argument: AMD's CPUs are better suited than GPUs for those tasks, which positions the company to capture demand in a segment where it holds a hardware edge.

The call lands alongside AMD's own upbeat guidance. The company recently doubled its total addressable market estimate to $220 billion. It also predicted that CPU sales for AI data centers will climb 70% in 2027.

Valuation remains the sticking point. AMD trades at a P/E ratio of 156x and a price-to-free cash flow ratio of 102x. Those multiples leave little room for execution slips. The PEG ratio of 1.7, though, suggests the stock may be cheaper than the headline P/E implies once growth is factored in. That is an interpretation, not a guarantee: PEG depends on growth forecasts that have yet to be proven out.