Advanced Micro Devices (AMD) has historically operated in the shadow of Intel (INTC) and, although it has been able to break away from those shackles thanks to a technology lead, it is now working hard to do the same with Nvidia (NVDA). That’s easier said than done, though, as Nvidia is unlikely to mirror Intel’s past missteps. This means what AMD CEO Lisa Su has to do is continue the fight. Most of the past week has been dominated by videos of Nvidia CEO Jensen Huang enjoying street food in China. Little do people know that Su was also recently on a mission to the country, just not for the food.
Su recently visited China to talk to some of AMD’s largest customers. She then stopped in Taiwan to make sure the supply chain serving these customers was working fine — and when I say working fine, I mean flawlessly executing the unprecedented CPU demand with which manufacturers are currently dealing. Su confirmed as much when she said CPU demand is significantly higher than what even management anticipated just 12 months ago. That is exactly why Su went to check on how the world’s largest contracted chipmaker, Taiwan Semiconductor (TSM), is able to handle the orders coming its way from AMD.
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AMD also intends to invest more than $10 billion in Taiwan’s AI sector. The investments are focused on advanced packaging and manufacturing for rack-scale systems. While we do not know whether these companies will be able to handle AMD’s orders, we do know that Su is exactly where she needs to be for AMD. If agentic AI is to lead the future of the company, then the CEO is taking exactly the right steps to benefit shareholders down the road.
About Advanced Micro Devices Stock
Based in Santa Clara, California, AMD is a leading semiconductor company specializing in high-performance computing and graphics solutions. The company operates through its Embedded, Data Center, and Client and Gaming segments, with its broad product portfolio including microprocessors, graphics processors, and system-on-chip (SoC) solutions.
AMD has delivered an exceptionally strong performance over the past year, significantly outpacing the S&P 500 ($SPX), up by 352% compared to the index's return of 30% during the same period. This strong rally reflects growing investor confidence in AMD shares. The momentum has also carried into this year as well, with the stock more than doubling year-to-date (YTD), up by 134%.
Analysts project earnings growth of 90% in fiscal 2026 and 72% in fiscal 2027. While the forward price-to-earnings (P/E) multiple of 75.4 times may mean the stock is overvalued, it is below the five-year average. The market may still be waking up to the opportunity that agentic AI presents. Thankfully, this makes AMD an interesting opportunity for new entrants.
www.barchart.com Advanced Micro Devices Delivers Solid Quarterly Results
AMD reported first-quarter fiscal 2026 earnings on May 5. Revenue for the quarter came in at $10.3 billion, with diluted EPS of 1.37. The data center segment generated $5.8 billion in revenue, marking 7% sequential growth and 57% year-over-year (YOY) growth. The segment also delivered $1.6 billion in operating income. Meanwhile, embedded segment revenue reached $873 million, up 6% YOY, while client and gaming revenue stood at $3.6 billion, increasing 22% YOY.
Going forward, Advanced Micro Devices guided Q2 revenue to be $11.2 billion, plus or minus $300 million. This outlook is higher than the company's prior Q1 guidance of approximately $9.8 billion, plus or minus $300 million. AMD projects a non-GAAP gross margin of around 56% and non-GAAP operating expenses of roughly $3.3 billion.
What Do Analysts Say About AMD Stock?
Following the earnings report, Bernstein upgraded Advanced Micro Devices from “Market Perform” to “Outperform” on May 6. Bernstein also raised its price target on the stock to $525 from $265. The upgrade was driven by strong Q1 performance across the client and gaming and data center segments. The firm also turned more bullish on earnings, forecasting more than $14 in EPS in fiscal 2027.
AMD stock carries a consensus “Strong Buy” rating from 45 Wall Street analysts with coverage. The mean price target of $460.40 has already been surpassed. However, the highest price target of $625 still offers additional 24% potential upside from current levels.
www.barchart.com On the date of publication, Jabran Kundi 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.
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