Quick Overview
- AMD shares climbed more than 18% following Q1 results that exceeded consensus with $10.25B revenue and $1.37 EPS
- Datacenter segment generated $5.78B, marking a 57% year-over-year increase powered by server CPU demand
- Management’s Q2 revenue outlook of $11.2B significantly surpassed analyst expectations of $10.5B
- Goldman Sachs and Bernstein elevated AMD to Buy ratings, establishing price targets of $450 and $525
- Strategic GPU agreements with OpenAI and Meta involve deployment of 6 gigawatts of AMD graphics processors
Advanced Micro Devices shares rallied more than 18% midweek following the chipmaker’s first-quarter financial results that exceeded analyst projections on all key metrics.
Advanced Micro Devices, Inc., AMD
The semiconductor company delivered revenue of $10.25 billion, surpassing the $9.9 billion consensus forecast. Per-share earnings reached $1.37, topping the $1.28 analyst estimate.
Shares traded near $421 during the session, marking a significant jump from approximately $355 in the previous trading day.
The datacenter division emerged as the standout performer, generating $5.78 billion in revenue—representing a 57% year-over-year increase. Robust demand for server CPUs accounted for the majority of growth.
Looking ahead to Q2, AMD projected revenue of $11.2 billion, substantially exceeding Wall Street’s $10.5 billion forecast. The company anticipates datacenter revenues will experience double-digit sequential growth, while server CPUs are expected to surge more than 70% compared to the prior year.
Market activity reflected strong investor interest. Trading volume exceeded 54 million shares on Wednesday, significantly above the three-month daily average of approximately 32.47 million.
Wave of Analyst Rating Increases
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 significant structural catalyst for AMD’s server CPU operations, characterizing the company as an “outsized beneficiary” of enterprise artificial intelligence deployment.
Bernstein raised AMD to Outperform from Market-Perform, boosting its price target from $265 to $525. Analyst Stacy Rasgon now forecasts AMD generating over $14 per share in earnings by 2027, with potential to approach $20 in 2028.
Rasgon highlighted that AMD’s total addressable market projection has doubled, with company leadership now estimating a 35% compound annual growth rate through 2030, ultimately reaching approximately $120 billion.
Seaport Research analyst Jay Goldberg raised AMD to Buy from Neutral with a $430 price target, emphasizing accelerating CPU demand alongside an increasingly favorable GPU trajectory for the coming year.
Raymond James maintained its Buy recommendation while elevating its target to $455 from $365. Robert W. Baird moved even higher, raising its objective to $625 from $300. DBS reaffirmed its Buy stance with a $500 target.
Strategic GPU Collaborations Strengthen Outlook
Both OpenAI and Meta have formalized strategic collaborations with AMD involving the deployment of 6 gigawatts of AMD graphics processing units. Goldman Sachs emphasized the Meta arrangement as especially significant.
Bernstein observed that AMD’s two primary GPU clients are “set to ramp into year-end,” indicating these figures remain underrepresented in current Street forecasts.
Seaport additionally noted that AMD obtained more favorable chip allocation from TSMC than anticipated, potentially bolstering near-term supply capabilities.
Rosenblatt Securities analyst Kevin Cassidy, recognized as the top-ranked analyst covering AMD, maintains an 80% accuracy rate over the past three months with an average return of 31.79% per recommendation. His two-year track record shows a 100% success rate with an average return of 191.49%.
AMD’s year-to-date performance now reflects a gain of 94.47%, while the stock has appreciated 253.99% over the trailing 12-month period.
