Citi now thinks AMD stock could rip another 25% because of Meta Muse

AMD ( AMD ) stock has more record highs ahead, says Citi.

Citi analyst Atif Malik raised his price target on AMD to $800 from $575 on Tuesday. Shares rose 1% in premarket trading and look set to open at another record high.

"Following the release of Meta Muse and our subsequent CPU TAM raise, we are raising estimates on AMD given our belief that AMD will be the primary beneficiary of the CPU renaissance and our belief that Meta is one of the largest customers of AMD's server business," Malik said.

Malik also struck a bullish tone on the future size of the CPU market.

"We update our CPU model post the launch of Muse, Meta's personal AI agent. Fundamentally, we view agentic AI as a potential orders-of-magnitude driver of compute demand relative to traditional chatbots," Malik added. "We believe the CPU TAM [total addressable market] expands from $29 billion in 2025 to $300 billion in 2030, or a 60% CAGR. We still expect AMD to be the key beneficiary of the CPU renaissance and Intel as a secondary beneficiary."

AMD has had quite a run of bullish catalysts in recent months.

Just two weeks ago, AMD signed an agreement to acquire World Labs , a San Francisco-based AI model lab that focuses on software for 3D environments. The purchase price: a cool $8.2 billion. The transaction is expected to close by the end of 2026.

World Labs was founded in 2024 and is led by Dr. Fei-Fei Li, a leading AI researcher known in tech circles as the "Godmother of AI." She was once chief scientist at Google ( GOOG ) Cloud.

AMD beat Wall Street expectations across the board for the second quarter in early August, posting record non-GAAP earnings per share of $1.66 versus consensus estimates of $1.61. Total revenue surged 50% year over year to a record $11.5 billion, clearing analyst projections of approximately $11.34 billion.

The strong top- and bottom-line performance was fueled by the company's Data Center segment. Revenue more than doubled year over year to $6.7 billion on robust demand for EPYC server CPUs and Instinct AI accelerators.

AMD projected second-half 2026 server CPU revenue to grow 80% year over year and 70% in 2027. It expects data center revenue to more than double in 2027, with AI graphics processing unit (GPU) revenue growing well over 100%.

"The CPU renaissance is playing out," Evercore ISI analyst Mark Lipacis said.

AMD also unveiled its next-generation AI chips, headlined by the Instinct MI450 Series GPUs and the 6th Gen EPYC Venice CPUs. The new chips are designed to power AMD's new Helios rack-scale AI systems , which combine GPUs, CPUs, networking, and software into an integrated platform for training and running large AI models.