Key Takeaways:
Advanced Micro Devices Inc. (NASDAQ: AMD) is set to report first-quarter earnings on May 5, with investors closely watching for continued growth in the company’s data center segment amid a broader artificial intelligence spending boom. The chipmaker has guided for revenue of approximately $9.8 billion, a 32% increase from the prior year, signaling sustained demand for its processors.
“Meaningful upsides” for AMD’s CPU franchise and a structural increase in demand prompted the recent upgrade, D.A. Davidson analyst Gil Luria said in a note to clients. The firm raised its rating on AMD to “Buy” from “Neutral” and lifted its price target to $375 from $220.
The Santa Clara, California-based company is benefiting from a surge in investment in AI infrastructure. For the first quarter, analysts expect adjusted earnings per share to climb 33.3% year-over-year to $1.04. This follows a quarter in which AMD’s data center revenue swelled 39% to $5.4 billion. The company’s non-GAAP gross margin is expected to hold steady at approximately 55%.
The upcoming report follows strong data center results from rival Intel Corp. (NASDAQ: INTC), whose Data Center and AI segment revenue jumped 22% to $5.1 billion in its most recent quarter. The performance from Intel suggests a healthy market for both central processing units and the graphics processing units that power AI applications, a market where AMD is competing fiercely with Nvidia Corp. (NASDAQ: NVDA).
Wall Street remains broadly positive on AMD, with 32 of 45 analysts tracked by Barchart rating the stock a “Strong Buy.” The optimism is fueled by expectations that AI-related demand will continue to accelerate. Stifel Nicolaus recently raised its price target on the stock to $320 from $280, keeping a “Buy” rating in place and citing confidence that AI infrastructure demand would keep running ahead of expectations.
AMD’s stock has risen 65% over the last month and more than 240% over the past year, trading at a premium to its five-year average multiples. The high valuation reflects the market’s optimism about the company’s growth trajectory in the expanding AI and data center markets.
The sustained rally puts pressure on the company to deliver a strong beat and raise its forecast. The guidance for the second quarter will be a key focus, as investors look for signs that the momentum from the ongoing AI build-out can be sustained through the rest of 2026.
This article is for informational purposes only and does not constitute investment advice.
