Quick Summary
- Advanced Micro Devices shares skyrocketed more than 18% following first-quarter results that crushed expectations with $10.25B revenue and $1.37 earnings per share
- The company’s datacenter segment delivered $5.78B in revenue, representing a 57% increase compared to the prior year, powered by robust server CPU sales
- Management’s Q2 revenue forecast of $11.2B significantly exceeded Wall Street consensus estimates of $10.5B
- Major investment firms including Goldman Sachs and Bernstein elevated AMD ratings to Buy, establishing new price objectives at $450 and $525
- Major tech players OpenAI and Meta revealed strategic collaborations with AMD, committing to deploy 6 gigawatts of AMD GPU infrastructure
Shares of Advanced Micro Devices experienced a dramatic surge exceeding 18% midweek following the semiconductor giant’s announcement of first-quarter financial performance that decisively exceeded analyst projections.
Advanced Micro Devices, Inc., AMD
The chipmaker delivered quarterly revenue reaching $10.25 billion, surpassing Wall Street’s anticipated $9.9 billion figure. Per-share earnings registered at $1.37, comfortably ahead of the consensus forecast calling for $1.28.
Shares were changing hands near $421 during trading hours, marking a substantial jump from approximately $355 in the prior session.
The datacenter business unit emerged as the star performer, generating $5.78 billion in sales — representing a 57% climb versus the same quarter last year. The gains were predominantly fueled by exceptional demand for server processors.
Looking ahead to the second quarter, AMD provided revenue guidance of $11.2 billion, significantly surpassing the Street’s $10.5 billion projection. The company anticipates datacenter sales will expand by double-digit percentages sequentially, while server CPU revenue is expected to climb over 70% on a year-over-year basis.
Market activity reflected heightened investor enthusiasm. Trading volume exceeded 54 million shares on Wednesday, substantially above the typical three-month daily average of approximately 32.47 million shares.
Wave of Positive Analyst Revisions
Goldman Sachs elevated its rating on AMD to Buy while dramatically increasing its price objective to $450 from a previous $240. Equity analyst James Schneider highlighted agentic artificial intelligence as a fundamental growth driver for AMD’s server processor operations, characterizing the company as an “outsized beneficiary” of enterprise AI transformation.
Bernstein upgraded its stance to Outperform from Market-Perform, simultaneously raising its target from $265 to $525. Analyst Stacy Rasgon now forecasts AMD will generate over $14 per share in earnings by 2027, with profitability potentially approaching $20 per share in 2028.
Rasgon emphasized that AMD’s total addressable market projection has effectively doubled, with executive leadership now estimating a 35% compound annual growth rate extending through 2030, ultimately reaching approximately $120 billion.
Seaport Research analyst Jay Goldberg raised his rating to Buy from Neutral while establishing a $430 price target, highlighting accelerating processor demand and an increasingly favorable graphics processing unit trajectory for the coming year.
Raymond James maintained its Buy recommendation while elevating its target to $455 from $365. Robert W. Baird took an even more bullish position, pushing its objective to $625 from $300. DBS confirmed its Buy rating with a $500 target price.
Strategic GPU Collaborations Strengthen Growth Narrative
Both OpenAI and Meta have publicly announced significant strategic agreements with AMD to implement 6 gigawatts of AMD graphics processing unit capacity. Goldman Sachs specifically highlighted the Meta infrastructure deployment as exceptionally noteworthy.
Bernstein observed that AMD’s two primary GPU customers are “set to ramp into year-end,” noting that these volume projections haven’t been completely incorporated into current Street financial models.
Seaport additionally noted that AMD obtained better-than-anticipated chip manufacturing allocation from TSMC, which should bolster near-term product availability.
Rosenblatt Securities analyst Kevin Cassidy, recognized as the highest-rated analyst covering AMD, maintains an 80% accuracy rate over the trailing three months with an average gain of 31.79% per recommendation. Extending to a two-year timeframe, his success rate reaches 100% with an average return of 191.49%.
AMD’s year-to-date performance now reflects a gain of 94.47%, with shares climbing 253.99% over the trailing twelve-month period.
