Wedbush Bullish on AMD (AMD.US) Before Earnings: Server CPUs Take the Lead, 2027 Guidance Awaits Validation

According to Zhihui Finance APP, AMD (AMD.US) will announce its Q3 2026 earnings on November 3. In his latest outlook, Wedbush analyst Matt Bryson provides a framework: the numbers this quarter themselves may not be the biggest variable; the strength of server CPUs determines the short-term upside, while management's statements about 2027 could serve as an anchor point for stock price valuation. Bryson gives AMD an "Outperform" rating with a price target of $600.

Server CPUs Are the Most Likely Source of Short-Term Upgrades

Wedbush analyst Matt Bryson wrote in a client report: "AMD has guided for third-quarter revenue of approximately $13 billion ± $300 million (up about 13% quarter-on-quarter, up about 41% year-on-year), and gross margin of about 56%. Our forecasts ($13.019 billion, 56.0%, and $1.93 per share) are basically at the midpoint of the guidance range and slightly below the market consensus ($13.079 billion, 55.9%, and $1.95 per share).

Management has raised its outlook for the full-year server business to over 80% year-on-year growth. However, given that the demand for compute power related to agent-style AI continues to outstrip supply, we believe server CPUs are the most likely source to provide upside surprises versus both market consensus and our forecasts. It’s worth noting that strengthening demand in this area may also drive margin improvement.”

Helios Order Visibility Comes with Execution Risks; 2027 Guidance Is More Critical

If server CPUs determine “whether this quarter can beat expectations,” then the ramp-up of Helios racks and MI450 will decide “whether the doubling guidance for 2027 can be trusted.”

AMD’s flagship AI products, Helios/MI450, began initial shipments at the end of Q3 and will enter larger-scale production ramp-up in Q4, with further acceleration in the first half of 2027. Management stated that customer order pulling is “ahead of initial forecasts,” and the list of partners has extended from the three key anchor customers—OpenAI, Meta, and Anthropic—to a wider pool.

The strongest binding anchor on the order side is Anthropic: in July, it announced a strategic partnership to deploy up to 2 gigawatts of MI450 series GPUs in Helios rack-level solutions, with the first batch of 1 gigawatt expected to go live in the first half of 2027. At the same time, AMD has committed to making a strategic equity investment of up to $5 billion in Anthropic.

Bryson added: “Our model forecasts Q4 revenue at $15.788 billion (up 21% quarter-on-quarter) and earnings per share at $2.30, while market consensus is about $16.2 billion and $2.65. Although our EPS forecast is below consensus, we acknowledge that we may be underestimating Helios shipments, as we have yet to obtain reliable data points to update our expectations.

We look forward to management reiterating its previous outlook of more than doubling data center revenue by 2027 (though the baseline may be higher due to 2026 performance), updating the progress of Helios shipments (as management has said they're tracking ahead of initial forecasts), and Progress on Anthropic’s plan to deploy up to 2 gigawatts of MI450 series GPUs (the first batch of 1 gigawatt will go online in the first half of 2027).”

Looking further ahead, Bryson stated that given that AMD’s stock price has risen sharply this year, the company's guidance and comments for 2027 could be even more significant.