Key Takeaways
- AMD shares rallied more than 18% following a Q1 earnings report that exceeded expectations with $10.25B revenue and $1.37 EPS
- The datacenter segment delivered $5.78B in revenue, marking a 57% year-over-year increase fueled by robust server CPU sales
- Second quarter revenue guidance of $11.2B significantly surpassed analyst expectations of $10.5B
- Goldman Sachs and Bernstein elevated AMD to Buy ratings, setting price targets at $450 and $525 respectively
- Major GPU deployment agreements with OpenAI and Meta include 6 gigawatts of AMD GPU infrastructure
Shares of Advanced Micro Devices skyrocketed more than 18% in Wednesday trading following a first-quarter earnings release that exceeded analyst projections on every major metric.
Advanced Micro Devices, Inc., AMD
The semiconductor giant posted quarterly revenue of $10.25 billion, surpassing the Street’s $9.9 billion forecast. Adjusted earnings per share reached $1.37, topping the consensus estimate of $1.28.
Shares were changing hands near $421 during Wednesday’s session, representing a significant leap from approximately $355 at Tuesday’s close.
The datacenter division stole the spotlight, generating $5.78 billion in revenue — a 57% year-over-year surge. Management attributed the growth primarily to exceptional demand for server CPUs.
Looking ahead to Q2, AMD projected revenue of $11.2 billion, handily beating Wall Street’s $10.5 billion projection. The company forecasts sequential double-digit growth in datacenter revenues, with server CPU sales expected to climb more than 70% compared to the prior year.
Trading activity reflected extraordinary investor interest. Over 54 million AMD shares traded hands Wednesday, substantially exceeding the three-month average daily volume of approximately 32.47 million.
Wall Street Upgrades Flood In
Goldman Sachs elevated AMD to a Buy rating while increasing its price objective to $450 from $240. Analyst James Schneider highlighted agentic AI as a major structural growth driver for AMD’s server CPU operations, positioning the company as an “outsized beneficiary” of corporate AI infrastructure spending.
Bernstein upgraded AMD to Outperform from Market-Perform and dramatically raised its target from $265 to $525. Analyst Stacy Rasgon’s updated financial model projects AMD generating over $14 per share in earnings by 2027, with potential to approach $20 per share in 2028.
Rasgon emphasized that AMD’s addressable market forecast has effectively doubled, with company leadership now projecting a 35% compound annual growth rate through 2030, translating to approximately $120 billion in market opportunity.
Seaport Research analyst Jay Goldberg initiated a Buy rating with a $430 price target, citing accelerating CPU demand and an increasingly favorable GPU revenue trajectory for 2026.
Raymond James maintained its Buy stance while elevating its target to $455 from $365. Robert W. Baird made an even bolder move, boosting its price objective to $625 from $300. DBS reaffirmed its Buy recommendation with a $500 target.
Strategic GPU Deals Strengthen Growth Narrative
Both OpenAI and Meta have formalized strategic collaborations with AMD involving the deployment of 6 gigawatts worth of AMD GPU computing power. Goldman Sachs specifically highlighted the Meta partnership as particularly significant.
Bernstein observed that AMD’s two primary GPU clients are “set to ramp into year-end,” suggesting these volumes haven’t been fully incorporated into current Wall Street forecasts.
Seaport also noted that AMD negotiated favorable chip allocation agreements with TSMC, potentially supporting near-term product availability.
Rosenblatt Securities analyst Kevin Cassidy, recognized as the highest-rated analyst covering AMD, maintains an 80% success rate over the past three months with an average 31.79% return per rating. His two-year track record shows a 100% success rate with an average 191.49% return.
AMD’s year-to-date performance now reflects a 94.47% gain, with shares climbing 253.99% over the trailing twelve months.
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