Key Highlights
- Advanced Micro Devices shares climbed more than 18% following Q1 results that crushed expectations with $10.25B revenue and $1.37 EPS
- Datacenter segment delivered $5.78B in revenue, representing 57% year-over-year growth fueled by server CPU momentum
- Second quarter revenue guidance of $11.2B significantly exceeded analyst consensus of $10.5B
- Major upgrades from Goldman Sachs and Bernstein pushed price targets to $450 and $525 respectively
- Strategic GPU partnerships with OpenAI and Meta will see deployment of 6 gigawatts worth of AMD graphics processors
Shares of Advanced Micro Devices experienced a dramatic surge of more than 18% during Wednesday’s trading session following the semiconductor giant’s release of first-quarter financial results that significantly exceeded analyst projections.
Advanced Micro Devices, Inc., AMD
The chipmaker delivered quarterly revenue of $10.25 billion, handily surpassing Wall Street’s consensus estimate of $9.9 billion. Adjusted earnings per share reached $1.37, comfortably ahead of the $1.28 analyst forecast.
Shares were changing hands near $421 during Wednesday’s session, representing a substantial jump from approximately $355 in the prior trading day.
The datacenter segment emerged as the star performer, generating $5.78 billion in revenue — a remarkable 57% increase compared to the same period last year. Robust demand for server CPUs provided the primary catalyst for this impressive growth.
Looking ahead to the second quarter, AMD provided revenue guidance of $11.2 billion. This forecast sits substantially above Wall Street’s $10.5 billion projection. The company anticipates datacenter revenues will expand by double-digits on a sequential basis, while server CPU revenue is projected to surge more than 70% year-over-year.
Trading activity reflected intense investor interest. More than 54 million AMD shares traded hands on Wednesday, significantly exceeding the three-month daily average of approximately 32.47 million shares.
Wave of Analyst Upgrades
Goldman Sachs elevated AMD to Buy status while simultaneously raising its price objective to $450 from a previous $240. Analyst James Schneider highlighted agentic AI as a significant structural growth driver for AMD’s server CPU operations, characterizing the company as an “outsized beneficiary” of widespread enterprise artificial intelligence adoption.
Bernstein upgraded AMD to Outperform from Market-Perform, substantially increasing its price target from $265 to $525. Analyst Stacy Rasgon’s updated financial model now projects AMD generating more than $14 per share in earnings by 2027, with the potential to approach $20 per share in 2028.
Rasgon emphasized that AMD’s total addressable market forecast has effectively doubled, with company management now projecting a compound annual growth rate of 35% extending through 2030, ultimately reaching approximately $120 billion.
Seaport Research analyst Jay Goldberg upgraded the stock to Buy from Neutral while establishing a $430 price target, highlighting accelerating CPU demand and an increasingly positive GPU outlook for the coming year.
Raymond James maintained its Buy recommendation while raising its target to $455 from $365. Robert W. Baird took an even more aggressive stance, boosting its price objective to $625 from $300. DBS reaffirmed its Buy rating with a $500 target.
Major GPU Partnerships Strengthen Growth Narrative
Both OpenAI and Meta have publicly announced strategic collaborations with AMD involving the deployment of 6 gigawatts of AMD graphics processing units. Goldman Sachs specifically highlighted the Meta partnership as exceptionally significant.
Bernstein observed that AMD’s two primary GPU customers are “set to ramp into year-end,” while noting these substantial deployments haven’t been fully incorporated into current Street estimates.
Seaport also pointed out that AMD successfully secured more favorable chip allocation from TSMC than previously anticipated, which could provide important near-term supply support.
Rosenblatt Securities analyst Kevin Cassidy, recognized as the top-rated analyst covering AMD, maintains an impressive 80% success rate over the past three months with an average return of 31.79% per rating. His two-year track record shows a 100% success rate with an average return of 191.49%.
AMD’s year-to-date performance now reflects a gain of 94.47%, while the stock has surged 253.99% over the trailing 12-month period.
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