Advanced Micro Devices AMD shares have surged 182.8% in the year-to-date period, outperforming the Zacks Computer and Technology sector’s increase of 22.7% and the Zacks Computer - Integrated Systems industry’s rise of 123.1%
AMD shares have also outperformed peers, including NVIDIA NVDA, Broadcom AVGO, and Intel INTC, year-to-date. NVIDIA, Broadcom, and Intel shares gained 22.6%, 3.3% and 178.6%, respectively, over the same time frame.
The outperformance reflects accelerating AI infrastructure investment, strong demand for EPYC server processors and Instinct AI accelerators, and expanding hyperscaler deployments. Strong adoption of Ryzen processors, growing enterprise market share and strategic AI partnerships with OpenAI, Meta, Anthropic and Microsoft are strengthening its growth prospects.
AMD Stock Performance
Image Source: Zacks Investment Research
AMD Benefits From Expanding Data Center Footprint
Advanced Micro Devices is benefiting from accelerating artificial intelligence (AI) infrastructure investments, strong demand for EPYC server CPUs and growing adoption of Instinct accelerators. The company’s expanding data center footprint, supported by partnerships with hyperscalers and AI developers, is strengthening its competitive position and driving revenue growth.
The company’s Data Center revenues surged 107% year over year to a record $6.7 billion in the second quarter of 2026, which accounted for 58% of total revenues. Strong demand for fifth-generation EPYC Turin processors and MI350 Series accelerators drove growth. Expanding deployments across Microsoft, Amazon, Google and Oracle are further strengthening AMD’s presence in cloud infrastructure.
AMD’s expanding AI infrastructure portfolio remains a key growth driver. AMD recently introduced AMD Helion, an open rack-scale infrastructure blueprint designed to support agentic AI workloads across hyperscale data centers and enterprises. Based on Open Compute Project specifications, Helion offers flexible CPU-only and integrated CPU/GPU configurations.
The CPU-only rack, powered by sixth-generation AMD EPYC processors, supports up to 32,768 cores, while the integrated configuration combines EPYC CPUs with Instinct MI350P GPUs. The platform incorporates open software, intelligent token routing and flexible cooling options to optimize performance, power efficiency and costs. AMD expects Helion configurations to become available in November 2026.
AMD’s Helios platform, powered by EPYC Venice CPUs, MI450 GPUs and Pensando networking, has been a key catalyst. Partnerships with OpenAI, Meta, Anthropic and Microsoft support accelerating deployments. AMD expects the Data Center business to more than double in 2027, while server CPU revenues are projected to increase more than 80% year over year in the second half of 2026 and more than 70% in 2027.
AMD Initiates Strong Q3 View
AMD’s expanding AI infrastructure portfolio, stronger hyperscaler partnerships, and robust demand for EPYC processors and Instinct accelerators are expected to drive top-line growth. For the third quarter of 2026, AMD expects revenues of approximately $13 billion, plus or minus $300 million. The midpoint implies growth of roughly 41% year over year and 13% sequentially.
The Zacks Consensus Estimate for AMD’s third-quarter 2026 revenues is pegged at $13.07 billion, suggesting growth of 41.34% year over year.
The Zacks Consensus Estimate for third-quarter 2026 earnings is pegged at $1.92 per share, which has been unchanged over the past 30 days and indicates 60% growth over the year-ago quarter’s reported figure.
Advanced Micro Devices, Inc. Price and Consensus
Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote
AMD Suffers From Stiff Competition, Supply Constraints
Despite its expanding portfolio, AMD faces stiff competition from NVIDIA, Broadcom and Intel. AMD continues to face intense competition in AI accelerators and server processors from NVIDIA's AI GPUs and Intel's CPUs. Intel is aggressively working to regain server market share through its expanding Xeon roadmap, Intel Foundry and advanced packaging technologies. Broadcom is increasing competitive pressure on AMD by strengthening its position in custom AI accelerators and high-performance networking for hyperscale customers.
Supply availability remains one of AMD’s biggest headwinds. Management said wafers, advanced process-node capacity, HBM, advanced packaging, substrates and several other components remain tight. AMD has been raising capital spending and working across its supply chain to expand capacity, but demand still runs ahead of supply in some areas.
The increasing contribution from data center AI accelerators and MI450 gross margins, which carry slightly below the company average, could constrain margin expansion. Softer PC demand, declining gaming revenues and reliance on large AI customers could also weigh on AMD’s performance.
AMD Shares Trade at a Premium
AMD shares trade at a premium, as reflected in a Value Score of F.
AMD stock trades at a forward 12-month price/earnings (P/E) of 49.86X compared with the broader sector’s 20.77X.
AMD Valuation
Image Source: Zacks Investment Research
Here’s Why AMD Stock is a Hold Now
AMD’s expanding Data Center footprint, strong EPYC demand and accelerating Instinct GPU adoption position the company well to capitalize on the rapidly growing AI infrastructure market. However, stiff competition, supply constraints and stretched valuation remain concerns. Therefore, despite strong AI-driven growth prospects and recent share-price momentum, investors may prefer to wait for a more attractive entry point in AMD shares.
AMD currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).