Semiconductor stocks are having yet another banner year. Gartner (IT) estimates that the global semiconductor industry would grow its revenue by 64% in 2026 to reach $1.32 trillion, with artificial intelligence (AI) processors and networking components doing most of the heavy lifting. Against this backdrop, Advanced Micro Devices (AMD) is a company worth watching closely.
Advanced Micro’s latest quarterly report makes a compelling case for its growing footprint in the AI infrastructure ecosystem. Its data center Graphics Processing Units (GPUs) are now pulling in strong customer demand, and the server Central Processing Unit (CPU) business has genuinely started to hit its stride on the back of rising AI inference workloads. As a result, its stock has gained 108.16% in the last three months.
More Top Stocks Daily: Go behind Wall Street’s hottest headlines with Barchart’s Active Investor newsletter.
However, Daiwa Securities threw a curveball on Wednesday, May 13, by downgrading AMD stock, citing the possibility that the recent share price surge could "moderate" before long. Analyst Louis Miscioscia acknowledged that Dr. Lisa Su leads AMD stock with "multiple vectors for growth," but pointed out that a near 150% climb in the stock over the past two months warrants a more measured stance.
Miscioscia dropped his rating to “Outperform” from “Buy” while simultaneously raising his price target to $500 from $250. He was clear that the downgrade speaks to valuation, not to any dimming of Daiwa's positive view on Advanced Micro’s growth trajectory. Daiwa also bumped its 2026 revenue, and EPS estimates to $49 billion and $7.25 respectively and set its 2027 bar at $72.7 billion in revenue and $12.85 in EPS.
This makes it worth knowing whether the rest of the market should take Daiwa's cue, or does AMD stock still has a few more cards up its sleeve.
About Advanced Micro Devices Stock
Headquartered in Santa Clara, California, Advanced Micro Devices designs semiconductors for data centers, PCs, gaming, and embedded systems. Holding a market cap of nearly $733.3 billion, the company brings to market a full lineup covering AI accelerators, CPUs, GPUs, Adaptive System-on-Chips (Adaptive SoCs), Field-Programmable Gate Arrays (FPGAs), and networking solutions under well-known brands such as Ryzen, EPYC, Radeon, Instinct, and Versal.
The scoreboard for Advanced Micro's shares reads like something straight out of a bull market fantasy. A 275.29% gain over the last 52 weeks already makes a strong case on its own, but the stock has also climbed 101.5% year-to-date (YTD).
Zooming in further, the last one month alone saw the stock skyrocket 67.19%, but in the past five trading sessions, AMD lost 5.19%
www.barchart.com 
www.barchart.com Valuation, however, is where the conversation gets a little more loaded. AMD stock is currently trading at 61.09 times forward adjusted earnings and 14.88 times sales, and both figures sit at a premium not just to the industry average but also to the company's own five-year historical multiple.
Advanced Micro Surpasses Q1 Earnings
On May 5, Advanced Micro dropped its Q1 FY2026 results and cleared the bar on both the top and bottom lines. Revenue climbed 37.8% year-over-year (YOY) to $10.25 billion, sailing past analyst expectations of $9.9 billion. Adjusted EPS jumped 42.7% from the same period last year to $1.37, ahead of the Street’s estimate of $1.29.
The quarter carried plenty of firepower from the company’s data center business along with strong demand flowing through every business unit. Management pointed to a sharp rise in AI infrastructure spending, which fueled a 57% YOY surge in data center revenue to $5.8 billion, mostly driven by strong sales of Extended Performance Yield Computing (EPYC) CPUs and Instinct GPUs.
The profitability picture held up just as well. Non-GAAP operating income increased 42.8% from the year ago period to $2.5 billion, while non-GAAP net income rose 44.6% from the previous year’s quarter to $2.3 billion.
Adjusted EBITDA moved higher by 40.5% from the year ago value to $2.75 billion, while free cash flow surged 253% from the prior year’s quarter to $2.57 billion. The balance sheet also stayed in fine fettle as cash and cash equivalents edged up to $5.6 billion at the end of the quarter from $5.5 billion on Dec. 27, 2025.
Looking ahead, management has flagged inferencing and agentic AI as the forces accelerating demand for high-performance CPUs and accelerators, with server growth expected to pick up meaningfully as supply scales to keep pace.
Nevertheless, for Q2 FY2026, Advanced Micro’s management expects revenue to land near $11.2 billion, with a possible swing of $300 million in either direction. The midpoint of the guidance signals approximately 46% YOY growth along with roughly 9% sequential growth.
On the other hand, analysts expect Q2 FY2026 EPS to skyrocket 400% YOY to $1.35. For full year FY2026, projections place the bottom line at $6.17, marking 88.7% growth from the previous year. Looking further down the road, FY2027 estimates point toward EPS of $10.56, reflecting another 71.2% jump from the prior year.
What Do Analysts Expect for Advanced Micro Stock?
While Daiwa is playing it cautiously optimistic, the rest of the Street seems ready to go all in. Goldman Sachs analyst James Schneider upgraded AMD stock to a “Buy” and nearly doubled his price target to $450 from $240, citing the tailwinds building around the server CPU business as agentic AI gains ground.
Bank of America's Vivek Arya raised his price target to $500 from $450 and kept his “Buy” rating intact. Furthermore, Bernstein went a step further and upgraded AMD stock to “Outperform” from “Market Perform” while raising its price target to $525 from $265.
The broader analyst community has anchored AMD stock with an overall "Strong Buy" rating. Among 45 analysts covering the stock, 35 carry a "Strong Buy" rating, two hold a "Moderate Buy," and eight remain on the sidelines with a "Hold."
The average price target of $456.95 indicates a 5.67% upside. Meanwhile, the Street-High target of $625 keeps a compelling upside case of 44.5% from the current levels.
www.barchart.com 
www.barchart.com On the date of publication, Aanchal Sugandh did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
POET Stock Jumped on $500 Million Deal With Lumilens. Its Financials Have a Long Way to Go. AMD Stock Has Been on a Wild Ride Higher but This Analyst Warns the Frenzy Could Soon Stop Unusual Options Activity: Revisiting 3 Bets I Might Have Made 6 Weeks Ago Oracle Went From Tech Dinosaur to AI Heavyweight