Harsh Kumar, a Piper Sandler analyst, upgraded AMD shares (NASDAQ:) from Neutral to Overweight with a $140.00 target share price. This is an increase from $98.00.

The call is less than two months after Kumar lowered AMD’s PT from $130.00 to $98.00. He also maintained a Neutral rating. After a significant pullback, AMD stock fell over 40% from its record-setting November highs last year. The analyst now believes that AMD shares are more positive.

Kumar sees solid core business fundamentals in addition to an attractive valuation.

“The company’s core businesses are running really well and continue to benefit from secular trends. In PCs we continue to see share gains in larger markets, as well strong commercial market traction. We see the following key factors in servers: 1) the annual upgrade cycle of new processors; 2) more traction at hyperscalers and 3) cloud- and enterprise tailwinds. These are all important drivers for continued share gains. Finally, it also appears graphics cards continue to gain traction in both the consumer and data center markets,” Kumar said in a client note.

The higher price target reflects the raised multiple (~23x previously) on the back of the “higher conviction in business fundamentals.”

AMD shares are up 3.5% pre-market Tuesday

By Senad Karaahmetovic