AMD Stock Sees Strong Performance Amid AI Chip Demand
Advanced Micro Devices reported a 50% year-over-year revenue increase in its second quarter of fiscal 2026, driven by its data center business. Despite a 200% stock price rise over the past year, analysts largely maintain 'Buy' ratings.
Key takeaways
- Advanced Micro Devices reported a 50% year-over-year revenue increase in its second quarter of fiscal 2026.
- The company's data center revenue saw substantial growth, increasing by 107% year-over-year.
- Despite a significant stock price increase over the past year, many analysts maintain 'Buy' ratings on AMD stock.
- Major clients like OpenAI, Microsoft, and Anthropic are increasing their use of AMD's AI GPUs and server infrastructure.
What Happened
Advanced Micro Devices (AMD) reported its second-quarter fiscal 2026 results, showing a 50% year-over-year increase in revenue, reaching $11.536 billion. This growth was primarily fueled by its data center segment, which saw a 107% rise compared to the previous year. The company also reported adjusted earnings per share of $1.66, surpassing analyst expectations.
The company's stock has experienced significant growth, with a 200% return over the past 12 months according to one publisher, and a 172.6% return over the past year according to another. Despite this performance, multiple brokerage firms have reiterated 'Buy' ratings for AMD stock, with price targets varying among analysts.
Background
AMD is a major supplier of graphics processing units (GPUs) for data centers, positioning itself as a key competitor to Nvidia in the artificial intelligence chip market. The company has been enhancing its AI chip offerings, with new series like MI450 and MI500 expected to compete with upcoming Nvidia products. Key customers like OpenAI and Microsoft are increasing their deployment of AMD's GPUs and Helios racks.
Key Facts
- Advanced Micro Devices (AMD) reported second-quarter fiscal 2026 revenue of $11.536 billion, a 50% increase year-over-year.
- The company's data center revenue increased by 107% year-over-year and 16% sequentially.
- AMD's stock has had a 12-month return of 200%.
- Phillip Securities reiterated a 'Buy' rating with a price target of $755.00.
- DA Davidson raised its price target to $550.
- Stifel reiterated a 'Buy' rating with a $635 price target.
- Benchmark maintained a 'Buy' rating with a $685 target.
- TD Cowen reiterated a 'Buy' rating with a $675 price target.
- Morgan Stanley increased its price target to $465.
- OpenAI and Microsoft will deploy 6 gigawatts of computing capacity using AMD's GPUs and Helios racks.
- Anthropic will deploy 2 gigawatts of MI450 GPUs in Helios racks starting in the first half of fiscal 2027.
Sources reviewed
Project Chintan independently synthesized and analyzed information cross-checked across the sources listed above.