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Key Takeaways:
- Analysts expect AMD to report revenue growth of 27% and earnings to narrow by 30% in Q2.
- The semiconductor leader is launching its most advanced AI accelerator yet with MI355 while demonstrating strong momentum across CPU and client businesses.
- Our valuation model predicts that AMD stock will deliver an annualized return of 13.9% over the next 2.4 years.
Advanced Micro Devices (AMD) is positioned to report its second-quarter results next week, following remarkable progress in artificial intelligence infrastructure and continued market share gains across its computing portfolio.
Analysts covering AMD stock expect revenue to increase by 27% year over year to $7.42 billion while earnings are forecast to decline by 31% to $0.48 per share.
The semiconductor innovator has demonstrated exceptional execution in scaling its AI accelerator business while maintaining leadership positions in high-performance computing and client processors.
AMD has consistently delivered strong financial performance with revenue growth accelerating and earnings expansion outpacing top-line growth.
AMD stock has beaten revenue and earnings estimates in each of the last five quarters. Despite its consistent outperformance, AMD stock has declined following its earnings results in four of the last five quarters.
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A Focus on AMD’s Infrastructure Leadership
AMD is launching the MI355 accelerator, delivering a massive 35x generational leap in inference performance while maintaining compatibility with existing data center infrastructure through the universal baseboard design.
AMD’s AI accelerator business ramped to over $5 billion in revenue during its first year following the December 2023 MI300 launch, representing the fastest product ramp in company history.
Strategic partnerships with industry leaders, including Meta, Microsoft, Oracle, and OpenAI, validate AMD’s AI infrastructure capabilities, with customers deploying MI300X accelerators for both training and inference workloads at production scale.
AMD’s open ecosystem approach through ROCm software stack and Ultra Accelerator Link consortium demonstrates a commitment to industry standards and developer accessibility across the AI landscape.
The upcoming MI400 series and Helios rack-scale solution, scheduled for 2026, represents a comprehensive platform integrating CPUs, GPUs, networking, and software into unified AI infrastructure systems.
Client business performance continues exceeding expectations with 68% revenue growth driven primarily by average selling price improvements as AMD gains share in premium desktop and commercial PC segments.
Server CPU momentum remains strong with EPYC processors achieving a record 40% market share while benefiting from enterprise refresh cycles and AI infrastructure buildouts.
Export restrictions impacted Q1 data center GPU revenue by approximately $700 million, though management maintains confidence in second-half acceleration with MI355 launches and expanded customer adoption.
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Is AMD Stock a Buy Before Its Q2 Earnings?
Our valuation model estimates that AMD stock will benefit from sustained AI infrastructure demand while expanding its addressable market through rack-scale solutions and enterprise adoption throughout the forecast period.
Based on assumptions derived from analysts’ consensus estimates, AMD stock is expected to appreciate from its current price of $180 to $246, representing a potential total return of 37% over the next 2.4 years.
This would translate to 14% annualized returns, suggesting AMD stock offers compelling upside potential for investors seeking exposure to artificial intelligence infrastructure transformation and high-performance computing trends.
Management’s strategic focus on open ecosystems and comprehensive solutions positions AMD to capture increasing content per deployment as customers transition from discrete components to integrated rack-scale platforms.
AMD’s diversified portfolio across data center, client, and embedded markets provides multiple growth drivers, while the cyclical embedded business recovery expected in 2026 should contribute additional margin expansion opportunities.
FAQs
1. Is AMD stock a buy or sell now?
Of the 54 analysts covering AMD stock, 36 recommend “Buy”, 16 recommend “Hold”, and two recommend “Sell”.
2. Can AMD stock reach $200?
Given AMD’s strong growth estimates, it’s possible the stock could surpass $200 by the end of 2026. However, analysts currently have an 18-month average price target of $153/share, meaning they don’t expect the stock to cross the $200 mark by 2026.
3. What is the AMD stock price target?
Our valuation model suggests a 2.4-year target price of $246, representing an upside potential of 37% from current trading levels.
4. Does AMD stock pay shareholders a dividend?
AMD does not currently pay dividends, instead focusing capital allocation on research and development investments and strategic acquisitions to capture AI market opportunities.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
