<\/p>\n
Shares of Advanced Micro Devices (AMD) are up 112.5% year-to-date, with the majority of the gains achieved in recent weeks.\u00a0<\/p>\n
From March 31 through May 8, AMD shares jumped 123.76%, according to Morningstar data, as Wall Street grew more optimistic about the company\u2019s position in the AI infrastructure market and its ability to gain share in both GPUs and CPUs.<\/p>\n
AMD was founded in 1969 by eight men, led by Jerry Sanders, the former Fairchild Semiconductor executive. Fairchild Semiconductor shares credit with Texas Instruments Incorporated for the invention of the integrated circuit.<\/p>\n
Decades later, AMD has emerged as one of only a few companies capable of competing at the highest end of the semiconductor industry.<\/p>\n
Today, AMD\u2019s biggest rivals are Nvidia (NVDA) in graphics processing units, or GPUs, used to power AI data centers, and Intel (INTC) in central processing units, or CPUs.\u00a0<\/p>\n
Investors have recently become more bullish on AMD as demand for AI computing continues to surge. Wall Street analysts are actively revising their target prices for the stock.<\/p>\n
AMD shares jump after reporting rosy earnings<\/p>\n
AMD still trails rival Nvidia in GPUs used to power AI data centers. But AMD has long been a major player in CPUs, a market that is seeing renewed demand as agentic AI changes computing needs.<\/p>\n
On May 5, AMD reported upbeat first-quarter results and outlook, and its shares jumped 18.61% on the following trading day.<\/p>\n
AMD stock closed at $455.19 on May 8.<\/p>\n
Getty Images<\/p>\n
The company posted adjusted earnings of $1.37 per share, beating expectations of $1.29 per share. Revenue rose 38% year over year to $10.25 billion, above analysts\u2019 estimates of $9.89 billion, while data center revenue climbed 57% to $5.8 billion.<\/p>\n
For the second quarter, AMD said it expects revenue of about $11.2 billion, above analysts\u2019 estimates of $10.52 billion, according to LSEG data pulled by CNBC.<\/p>\n
AMD CEO Lisa Su said in a statement that the data center business is now the \u201cprimary driver of our revenue and earnings growth.\u201d<\/p>\n
Related: Apple CEO has stark message for Micron stock investors<\/p>\n
“We are seeing strong momentum as inferencing and agentic AI drive increasing demand for high-performance CPUs and accelerators,” Su said. “Looking ahead, we expect server growth to accelerate meaningfully as we scale supply to meet demand.”<\/p>\n
Su said AMD has \u201cstrong and increasing confidence\u201d in its ability to reach tens of billions of dollars in data center AI revenue next year, CNBC reported.<\/p>\n
The semiconductor industry has been dealing with a global memory shortage due to booming AI demand, limited manufacturing, and supply chain disruptions tied to the war in Iran. That has fueled a rally in semiconductor stocks and prompted analysts to rethink price targets for several chipmakers.<\/p>\n
Analysts raise AMD stock targets after earnings<\/p>\n
Wedbush analysts led by Matt Bryson raised their price target on AMD stock to $450 and reiterated an outperform rating after the earnings report, according to a note sent to TheStreet.<\/p>\n
The analysts said AMD\u2019s accelerating growth is being driven by both higher unit sales and pricing, with stronger demand tied to compute racks used for agentic AI.<\/p>\n
Related: Analysts reset Sandisk stock forecast after massive rally<\/p>\n
They added that AMD’s management expects the trend to continue supporting its server CPU business through 2026 and 2027.<\/p>\n
Wedbush also said AMD\u2019s data center GPU business appeared stronger than previously expected, even though CPUs drew most of the investor attention after the report.<\/p>\n
\u201cWhile CPUs stole the headlines, data center GPU demand also appeared to exceed our prior expectations,\u201d the analysts wrote.<\/p>\n
Wedbush said AMD’s management is confident about a stronger second-half ramp for its MI450 and MI455 chips, but the analysts are not fully convinced by management\u2019s outlook for GPUs, though it noted that strong CPU demand could help offset any slower-than-expected GPU ramp.<\/p>\n
More Wall Street<\/p>\n
JPMorgan resets S&P 500 price target for the rest of 2026Vanguard challenges the S&P 500 as a one-stop strategyGoldman Sachs resets Broadcom stock forecast<\/p>\n
“We’ve struggled somewhat to independently corroborate management’s 2H outlook; however, we see strength in CPUs as offering a bit of insurance (given the ability to potentially reallocate supply) if GPUs ramp somewhat behind current expectations,” the analysts wrote.<\/p>\n
Meanwhile, Citi analysts led by Atif Malik raised their AMD price target to $358 while keeping a neutral rating on the stock.<\/p>\n
The analysts said they remain positive on AMD\u2019s CPU opportunity,\u00a0 but are still waiting to see how the company\u2019s next-generation GPU products, including MI450 and Helios racks, perform after launch.<\/p>\n
“While we are constructive on AMD\u2019s CPU opportunity on agentic AI demand, we await the release and success of its next gen GPU product MI450 and Helios racks,” Citi wrote, adding that AMD is expected to significantly ramp GPU sales in the second half of 2026.<\/p>\n
“We also expect the company to have an aggressive ramp of GPU sales in 2H26,” the analysts said.<\/p>\n
Shares of AMD closed at $455.19 on May 8, already moving above two analysts\u2019 price targets.<\/p>\n
Related: Cathie Wood buys $14.9 million of tumbling AI stock<\/p>\n
#Analysts #turn #heads #AMD #stock #forecastafter #massive #rally<\/p>\n","protected":false},"excerpt":{"rendered":"
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