AMD stock up 117% as AI accelerator bets challenge Nvidia's grip

AMD's data center business more than doubled to $6.72 billion in the June quarter, and gigawatt-scale commitments from Anthropic and Meta are turning the chipmaker into the clearest alternative to Nvidia's dominance of AI accelerators. Shares have climbed 117.4 percent this year and 176.18 percent over the past 12 months, outpacing Nvidia's 16.79 percent year-to-date gain.

"The data center AI accelerator market will grow more than 45 percent annually to approximately $1.4 trillion by 2030," Chief Executive Lisa Su said on the earnings call, upgrading the company's total addressable market outlook.

Total revenue reached $11.54 billion in Q2 FY26, up 50.11 percent year over year, with non-GAAP earnings per share of $1.66. Management guided third-quarter revenue to roughly $13 billion, about 41 percent year-over-year growth. The data center segment now carries the bulk of the expansion as the Helios rack-scale platform — delivering up to 15 percent more throughput at the same rack power and up to 30 percent more tokens per dollar than the competition — lands its first large customers. Anthropic committed to up to 2 gigawatts of MI450 deployments, and Meta signed for 6 gigawatts.

AMD trades at 175 times trailing earnings and roughly 81 times forward earnings, a premium that leaves little room for a stumble. Chief Financial Officer Jean Hu said earnings per share will be "significantly higher than $20" against the prior long-term target. 24/7 Wall St. rates the stock a buy with a $628.27 price target, implying 34.94 percent upside from $465.58.

The Valuation Gap With Nvidia and Broadcom

Nvidia remains the obvious comparison. It grew fiscal Q2 revenue 105.85 percent to $96.22 billion but trades at a price-to-earnings ratio of 44, well below AMD's multiple. 24/7 Wall St.'s Nvidia target of $300.33 offers 38.05 percent upside. Broadcom, the custom-silicon alternative, posted AI semiconductor revenue of $10.80 billion in Q2 FY26, up 143 percent year over year, with third-quarter AI revenue guided to $16 billion. AMD's merchant GPU model gives it broader addressable customer diversity than either rival's approach.

The bull case rests on execution. Helios yields, hyperscaler capital-expenditure signals, and export controls on the MI308 remain the swing factors. Gaming revenue fell 31 percent year over year, capital expenditures jumped 186.52 percent, and free cash flow slipped 9.89 percent as the Helios ramp absorbs cash. 24/7 Wall St.'s bull scenario points to $651.55, while the bear case lands at $480.08.

For investors, the question is whether AMD's multiple already prices in the Anthropic and Meta commitments. The stock's 117 percent run this year suggests much of the optimism is in the price, yet the $1.4 trillion accelerator market by 2030 leaves room for the merchant model to compound. The setup weakens if Helios yields slip or hyperscaler capital-expenditure plans soften, but the gigawatt-scale contracts give the data center story a revenue floor that Nvidia's merchant rivals have lacked.

This article is for informational purposes only and does not constitute investment advice.