AMD is winning AI servers, but $646 needs flawless FY27 delivery. I see $11.27 of earnings and dilution, worth $564.
Key points
- $13.0 billion per quarter in Q3 FY26 is guided revenue, up 41% for Q3 FY26 on server and AI chips.
- $30.3 billion in commitments at June 2026 for supply and cloud capacity must be paid before FY27 cash arrives.
- 320 million shares by FY31 in warrants to two customers equal 20% of shares in FY26.
The call
The math is unforgiving from here. At $645.90 per share in October 2026, the stock needs flawless delivery. That means about $12.92 per share in FY27 earnings. A 50 times multiple in FY27, or price for each dollar of earnings, leaves no room for error.
Quarterly revenue jumps on Data Center ramp ($ billions)SEC filings to Q2 FY26, guide and author estimates; as of Oct 7 2026.
Growth will still impress but earn less. I expect $71.9 billion of revenue in FY27 on a server and AI ramp. I expect $11.27 per share in FY27 earnings after added shares. My $564 per share in 12 months reflects that shortfall.
Target needs a rich multiple even on $71.9B sales ($ per share)Author estimates for FY27; as of Oct 7 2026.
Valuation
| Item | Amount |
|---|
| FY27 revenue in FY27 | $71.9 billion in FY27 |
| FY27 gross profit in FY27 | $40.6 billion in FY27 |
| FY27 earnings per share in FY27 | $11.27 per share in FY27 |
| Multiple in FY27 | 50 times earnings in FY27 |
| Target in 12 months | $564 per share in 12 months |
| A 50 times multiple in FY27 fits a fast grower with customer risk in FY27. It sits below $645.90 per share in October 2026 but above weak outcomes in FY27. A 13% downside in 12 months supports a sell at this price. | |
Risks
- Helios demand in FY27 beats supply plans and lifts sales in FY27, seen in raised guides in FY27.
- Software gains in FY27 unlock repeat orders and lift share in FY27, seen in cloud expansions in FY27.
- Dilution in FY27 proves smaller as milestones slip beyond FY27, seen in filings in FY27.
What would change my mind
Cash deposits in FY27 that cover capacity costs in FY27 would support a higher target in 12 months.