Advanced Micro Devices (NASDAQ: AMD) stock gained attention after Citi turned more bullish on the chipmaker. Citi analyst Atif Malik reportedly upgraded AMD from Neutral to Buy and raised the price target to US$575 from US$460.
The upgrade has increased investor interest because AMD is trying to become a bigger player in the fast-growing artificial intelligence chip market. Nvidia remains the clear leader in AI GPUs, but Wall Street is now asking an important question: Can AMD become the strongest alternative?
Why Citi Upgraded AMD Stock
Citi’s upgrade is mainly based on AMD’s growing AI opportunity. For many years, AMD was seen mostly as a CPU company. Its EPYC server processors have helped it gain share in data centres. But now, investors are watching its Instinct GPUs more closely.
AI GPUs are important because they power large AI models, cloud computing systems and advanced data centre workloads. NVIDIA is still the dominant company in this market, but big technology companies may not want to depend on only one supplier.
That is where AMD could benefit. Citi reportedly believes AMD can become an important second source for AI GPUs behind Nvidia. This does not mean AMD will replace Nvidia soon. It means AMD could win more business from cloud and internet companies that want more chip supply and better pricing options.
Meta Could Be a Key Opportunity
According to market reports citing Citi’s note, AMD could win a meaningful share of Meta Platforms’ future GPU demand. Reports suggest a possible multi-year deployment may begin in late 2026.
This is important because Meta is one of the biggest spenders on AI infrastructure. If AMD can become a larger supplier to Meta or other major cloud customers, it could strengthen its position in the AI chip market.
Citi reportedly estimates AMD’s AI-related chip sales could reach US$33 billion in 2027 and US$50.8 billion in 2028. These are analyst estimates, not official AMD guidance. Still, they show why some investors believe AMD has more upside in AI than the market previously expected.
AMD’s Data Centre Business Is Growing
AMD’s latest results show strong momentum. In the first quarter of 2026, AMD reported revenue of US$10.253 billion, up 38% from a year earlier. Its Data Centre segment revenue reached US$5.8 billion, up 57% year over year.
AMD said the growth was driven by strong demand for EPYC processors and the continued ramp of Instinct GPU shipments. This matters because the data centre segment is the part of AMD’s business most closely linked to AI demand.
If AMD continues to grow in data centres, the company could become more important in the AI infrastructure market.
Can AMD Catch Nvidia?
Nvidia is still far ahead. In its fiscal first quarter ended April 26, 2026, Nvidia reported record revenue of US$81.6 billion. Its Data Centre revenue alone was US$75.2 billion.
That scale shows how strong Nvidia’s lead remains. Nvidia also has a major software advantage through CUDA, which many developers and companies already use. This makes it difficult for rivals to catch up quickly.
For AMD, the more realistic goal is not to overtake Nvidia in the near term. The goal is to become the clear No. 2 supplier in AI GPUs.
Investor Takeaway
AMD’s Citi upgrade shows that investors are taking its AI chip opportunity more seriously. Nvidia remains the leader, but AMD does not need to beat Nvidia to create value for shareholders.
If AMD wins more AI GPU orders, improves its software ecosystem and expands its role with large cloud customers, the stock could remain attractive for long-term investors.
For now, AMD is a strong AI chip challenger, not the market leader. But in a market growing this fast, becoming the top alternative to Nvidia could still be a very valuable position.
