Advanced Micro Devices ( (AMD) ) has been popular among investors this week. Here is a recap of the key news on this stock.
Advanced Micro Devices is emerging as a key winner in the AI infrastructure race, even as investors debate how much of its future growth is already priced in. Recent Q2 results showed revenue jumping 50% year-over-year to $11.54 billion and non-GAAP EPS soaring 82% to $1.66, with data center operating income flipping to a $2.1 billion profit.
Management expects Q3 revenue of $12.7 billion to $13.3 billion, well above Wall Street estimates, driven by strong demand for its MI accelerators and Helios rack-scale systems. Yet some investors remain focused on margins, as AMD’s use of high-capacity HBM4 memory could require rack price hikes of roughly 9%-10% by 2027 just to preserve profitability.
Despite margin concerns, top investor Louis Gerard still rates Advanced Micro Devices a Buy, arguing that Nvidia will likely raise server prices as well, making higher costs easier to pass through. He notes that AMD’s valuation premium to Nvidia has narrowed, and the stock’s lofty current multiple looks more reasonable against forward earnings.
On the data center CPU front, AMD is aggressively targeting Intel’s installed base with its 5th Gen EPYC processors and upcoming 6th Gen Venice chips. The company claims customers can cut Intel Xeon server counts by as much as 86%, slashing power consumption by 69% and three-year total cost of ownership by 41%, while freeing up space and power for AI GPUs.
This consolidation pitch could become more compelling if U.S. semiconductor tariffs rise, as fewer servers per workload may reduce the number of chips foreign buyers need to import. AMD also argues that lower core counts can trim software licensing fees where pricing is based on cores or sockets, adding another lever to improve total data center economics.
Wall Street sees even more upside ahead for Advanced Micro Devices. J.P. Morgan’s Harlan Sur projects server CPU revenue growth of more than 70% year-over-year in calendar 2027 and data center revenue rising well over 100%, suggesting AMD’s long-term earnings power may exceed its prior goal of $20 EPS in three to five years.
Sur still cautions that execution risks remain around Helios, AMD’s first rack-scale system, and that growing MI450 volumes could pressure gross margins through 2027. Reflecting that, he maintains a Neutral rating, though his $550 price target still implies roughly 20% upside from current levels.
Street consensus is even more bullish, with analysts collectively assigning Advanced Micro Devices a Strong Buy rating. The average price target of about $647 signals potential gains of more than 40% over the next year, underlining investor belief that AMD can convert its rapid AI and data center momentum into sustained earnings growth.