TLDR
- AMD stock has gained 14.1% over the past month, outperforming the S&P 500’s 8.2% increase
- The company announced a deal to sell ZT Systems’ server manufacturing business to Sanmina while retaining the AI solutions design unit
- Earnings estimates have been revised downward recently, with current quarter expectations dropping 44.1% over 30 days
- Wall Street analysts maintain a Moderate Buy rating with 22 Buy recommendations and an average price target of $126.55
- AMD reported Q1 revenues of $7.44 billion, beating consensus estimates by 4.45% with strong year-over-year growth of 35.9%
Advanced Micro Devices has captured investor attention with a strong monthly performance even as earnings estimates face downward pressure. The chipmaker’s stock has climbed 14.1% over the past month, outpacing the broader S&P 500’s 8.2% gain.
The semiconductor company’s recent momentum comes despite some headwinds. AMD shares remain down 8.4% year-to-date due to macro challenges and trade policy uncertainties.
Earnings projections have seen recent revisions that paint a mixed picture. The current quarter consensus estimate sits at $0.63 per share, representing an 8.7% year-over-year decline. Over the last 30 days, this estimate has dropped by 44.1%.
For the full fiscal year, analysts expect earnings of $4.06 per share, indicating 22.7% year-over-year growth. However, this estimate has also been trimmed by 11.1% over the past month.
Next year’s projections remain more optimistic. The consensus estimate of $5.70 per share suggests 40.2% growth, though this figure has declined 3.2% recently.
Strategic Moves in AI Infrastructure
AMD made headlines this week with its announcement regarding ZT Systems. The company agreed to sell ZT Systems’ server manufacturing business to integrated manufacturing solutions provider Sanmina.
$AMD TO SELL ZT SYSTEMS' DATA CENTER INFRASTRUCTURE UNIT TO SANMINA FOR $3B 😳 pic.twitter.com/MqD9zRM7VT
— Shay Boloor (@StockSavvyShay) May 19, 2025
The deal reflects AMD’s focused approach to artificial intelligence growth. AMD will retain ZT Systems’ rack-scale AI solutions design business, keeping roughly 1,200 engineers with specialized experience.
Stifel analyst Ruben Roy views this move favorably. He maintained his Buy rating with a $132 price target, suggesting over 19% upside potential. Roy believes the transaction aligns with AMD’s technological expansion goals in AI infrastructure.
The analyst considers AMD’s access to ZT’s engineering talent a crucial factor for the company’s long-term AI roadmap. This expertise could prove valuable as AMD works to compete in the growing data center GPU market.
Revenue Growth Continues Strong Trajectory
AMD’s financial performance has shown consistent strength in recent quarters. The company reported first-quarter revenues of $7.44 billion, marking 35.9% year-over-year growth.
This performance exceeded analyst expectations by 4.45%, based on the consensus estimate of $7.12 billion. The company has now beaten revenue estimates in each of the trailing four quarters.
Earnings per share also impressed investors. AMD posted $0.96 per share compared to $0.62 in the prior year period. This represented a 3.23% surprise above consensus expectations.
Looking ahead, revenue projections remain robust. The consensus sales estimate for the current quarter points to $7.41 billion, indicating 27% year-over-year growth.
Full-year revenue estimates show continued expansion. Analysts project $31.79 billion for the current fiscal year and $37.01 billion for next year, representing growth rates of 23.3% and 16.4% respectively.
Analyst Sentiment Remains Positive
Wall Street analysts maintain confidence in AMD’s prospects despite recent estimate revisions. The stock carries a Moderate Buy consensus rating from analysts.
The rating breakdown includes 22 Buy recommendations and nine Hold ratings. No analysts currently rate the stock as a Sell.
Evercore analyst Mark Lipacis offered perspective on AMD’s competitive position. He noted that management compares their GPU market approach to their successful server CPU strategy. The company believes it’s following a similar timeline for market share gains.
Lipacis maintained his Buy rating with a $126 price target, reflecting about 14% upside potential. He emphasized AMD’s solid momentum across GPU, CPU, and Client markets.
The average price target among analysts stands at $126.55, implying 14.3% upside from current levels. This suggests continued optimism about the company’s growth trajectory.
AMD currently trades at a premium valuation compared to peers, earning a D grade on Zacks’ Value Style Score. Despite this, analysts remain focused on the company’s revenue growth and market position in key segments.
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