Key Takeaways
- AMD shares exploded more than 18% higher following a decisive Q1 earnings beat with $10.25B revenue and $1.37 EPS
- Datacenter segment delivered $5.78B in revenue, representing a 57% year-over-year surge fueled by server CPU momentum
- Q2 revenue outlook of $11.2B significantly exceeded analyst consensus of $10.5B
- Goldman Sachs and Bernstein elevated AMD to Buy ratings, establishing price targets of $450 and $525
- Major AI partnerships with OpenAI and Meta involve deployment of 6 gigawatts worth of AMD GPUs
Advanced Micro Devices shares rocketed more than 18% higher Wednesday following the chipmaker’s impressive first-quarter financial report that exceeded analyst projections on every key metric.
Advanced Micro Devices, Inc., AMD
The semiconductor giant delivered revenue totaling $10.25 billion, surpassing Wall Street’s anticipated $9.9 billion. Per-share earnings reached $1.37, comfortably clearing the $1.28 consensus forecast.
Shares were changing hands near $421 during Wednesday’s trading session, marking a substantial climb from approximately $355 the previous day.
The datacenter division stole the spotlight, generating $5.78 billion in revenue — representing a robust 57% increase compared to the same period last year. Strong demand for server CPUs drove the impressive performance.
Looking ahead to Q2, AMD projected revenue of $11.2 billion, substantially exceeding the Street’s $10.5 billion forecast. The company anticipates datacenter revenues will expand by double-digits sequentially, while server CPU sales are projected to surge more than 70% year-over-year.
Trading activity reflected intense investor interest. Over 54 million AMD shares exchanged hands Wednesday, significantly surpassing the three-month average daily volume of approximately 32.47 million.
Wall Street Analysts Rush to Raise Targets
Goldman Sachs elevated AMD to a Buy recommendation while increasing its price objective to $450 from $240. Analyst James Schneider identified agentic AI as a fundamental catalyst for AMD’s server CPU operations, characterizing the company as an “outsized beneficiary” of enterprise artificial intelligence deployment.
Bernstein upgraded AMD to Outperform from Market-Perform, dramatically raising its target from $265 to $525. Analyst Stacy Rasgon currently 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 effectively doubled, with company leadership now forecasting a 35% compound annual growth rate through 2030, ultimately reaching approximately $120 billion.
Seaport Research analyst Jay Goldberg upgraded AMD to Buy from Neutral, establishing a $430 price target while citing accelerating CPU demand and an increasingly promising GPU trajectory for the coming year.
Raymond James maintained its Buy stance while elevating its target to $455 from $365. Robert W. Baird took an even more aggressive approach, boosting its price objective to $625 from $300. DBS reaffirmed its Buy rating accompanied by a $500 target.
Major AI Partnerships Strengthen Growth Narrative
Both OpenAI and Meta have unveiled strategic collaborations with AMD centered on deploying 6 gigawatts of AMD graphics processing units. Goldman Sachs specifically highlighted the Meta arrangement as exceptionally significant.
Bernstein observed that AMD’s two primary GPU customers are “set to ramp into year-end,” noting these volumes haven’t been completely incorporated into current Wall Street projections.
Seaport additionally pointed out that AMD secured more favorable chip allocation from TSMC than anticipated, potentially supporting supply availability in the near term.
Rosenblatt Securities analyst Kevin Cassidy, recognized as the highest-rated analyst covering AMD, maintains an 80% accuracy rate over the previous three months with an average 31.79% return per rating. His two-year track record shows a 100% success rate delivering an average 191.49% return.
AMD’s year-to-date performance now registers at 94.47%, while the stock has climbed 253.99% over the trailing 12-month period.
