CNBC's Jim Cramer and HSBC analysts are on opposite sides of the fence when it comes to Advanced Micro Devices (AMD), and the debate boils down to a classic Wall Street question: Is the stock too expensive, or is it just getting started?

Cramer, never one to shy away from a bullish call, defended AMD after HSBC downgraded the stock to Hold from Buy. He argued that the company's AI-driven demand for CPUs will keep pushing shares higher, even after a massive run-up. HSBC, meanwhile, raised its price target to $340 from $335 but warned that the stock has already re-rated significantly—from a 19x to a 33x multiple on 2027 earnings—and now trades near its 52-week high after a 265% rally over the past year.

So who's right? Let's break it down.

Cramer Sees More Upside From AI Demand

Cramer said on Monday that he expects an "upside surprise" from AMD's upcoming results and recommended buying the stock ahead of earnings. He highlighted CEO Lisa Su's leadership and expressed confidence in the company's position in the semiconductor and AI ecosystems. "AI-driven demand for CPUs will continue to support the company's growth," he argued, pushing back against the notion that the stock has run too far, too fast.

HSBC Downgrades On Valuation Concerns

HSBC's downgrade wasn't exactly a slap in the face—they still raised their price forecast to $340 from $335. But the firm noted that AMD's stock has already priced in a lot of good news. The stock moved from a 19x to a 33x multiple on 2027 earnings estimates, and with a 52-week high of $362.79 in sight, HSBC sees limited upside from here. They also pointed to capacity constraints that could cap earnings growth, applying a 31x P/E multiple to their revised 2027 EPS estimate and introducing 2028 projections to signal a more cautious outlook.

Limited Earnings Upside Cited

HSBC analysts argued that constrained chip capacity limits how much AMD can grow earnings in the near term. That's a real concern—if AMD can't make enough chips to meet demand, the revenue upside is capped. But Cramer sees it differently: he thinks the demand is so strong that even with constraints, AMD will surprise to the upside.

Last week, Cramer outlined a bullish view on AMD and its semiconductor peers, tying their outlook to continued strength in data centers and the broader AI-driven technology shift. He specifically said he would buy Lumentum Holdings (LITE), Arista Networks (ANET), and Astera Labs (ALAB), emphasizing their role in helping machines communicate within data centers.

Data Center Plays Drive Broader Semiconductor Strength

Cramer pointed to strong momentum in data center-related stocks, noting that companies enabling connectivity and infrastructure are benefiting from rising demand. He framed these companies, alongside AMD, as central beneficiaries of what he described as a "fourth industrial revolution" driven by increasing reliance on computing power.

NVIDIA, ARM, and AI Leaders Remain Key Rivals

Cramer also identified NVIDIA (NVDA) as a leading player in AI infrastructure, reinforcing its dominance in data centers. He highlighted Arm Holdings (ARM) as an important competitor, noting its role in designing chip architectures and producing CPUs. The competitive landscape is fierce, but Cramer sees AMD holding its own.

Technical Analysis

AMD is in a powerful long-term uptrend, up 239.54% over the past 12 months, and it's holding well above its major moving averages. At $348.40, the stock is trading 19.6% above its 20-day SMA ($290.96) and 64% above its 200-day SMA ($212.29)—a kind of separation that often attracts momentum buyers but can also raise the odds of sharper pullbacks.

The trend structure remains constructive with the 20-day SMA above the 50-day SMA, and the longer-term "golden cross" (50-day SMA above the 200-day SMA) that formed in July 2025 still supports the broader bullish regime. With the 52-week high at $362.79 nearby, traders are watching whether the price can push into that prior peak zone or stalls and mean-reverts toward faster averages.

RSI is the cleanest momentum read right now: at 70.07, it's in overbought territory, signaling the move is getting stretched versus its recent pace. In plain terms, RSI helps gauge whether buying pressure has become crowded; overbought doesn't mean "must fall," but it often means upside can get choppier and dips can be sharper if buyers step back.

• Key Resistance: $362.79 — near the 52-week high zone where sellers previously showed up
• Key Support: $290.96 — aligns with the 20-day SMA, a common "first pullback" area in strong trends

Earnings & Analyst Outlook

Looking further out, the next major catalyst for the stock arrives with the August 4, 2026 (estimated) earnings report.

• EPS Estimate: $1.39 (Up from 48 cents YoY)
• Revenue Estimate: $10.49 Billion (Up from $7.68 Billion YoY)
• Valuation: P/E of 130.9x (Indicates premium valuation relative to peers)

AMD Price Action: Advanced Micro Devices shares were up 1.91% at $348.05 during premarket trading on Tuesday. The stock is approaching its 52-week high of $362.79.