For the longest time, Nvidia (NVDA) has enjoyed an open runway in the data center and artificial intelligence GPU market.

But on June 12, Advanced Micro Devices (AMD) made it clear that it was no longer content staying in the shadows. In a detailed reveal, the company introduced its upcoming Instinct MI400 series, a new breed of AI chips set to launch next year. 

These chips form the core of a larger vision called Helios, a full server rack capable of connecting thousands of chips into one powerful “rack-scale” system. That architecture puts AMD head-to-head with Nvidia’s Blackwell platform, which links together 72 GPUs in a single configuration.

AMD also drew a line in the sand on inference performance. Its new chips come with more high-speed memory, making it possible to run massive AI models on a single GPU. As anticipation builds, let us see how high this can take the AMD stock.

About Advanced Micro Devices Stock

Advanced Micro Devices (AMD), based in Santa Clara, California, has carved out a formidable presence in the high-performance computing landscape with a market cap of $205.6 billion. AMD delivers one of the industry’s most comprehensive portfolios of advanced processor technologies.

In the last three months alone, AMD’s stock has gained 22.5%, significantly outpacing the broader S&P 500 Index ($SPX), which rose by 5.4% in the same period.

Currently, AMD trades at 40.2 times forward earnings and 8 times its sales. Both metrics sit below the five-year historical average. This signals a potential window for investors looking for exposure to the next wave of computing innovation.

Advanced Micro Devices Surpasses Q1 Earnings

On May 6, Advanced Micro Devices stepped into the earnings spotlight and delivered a performance that raced ahead of Wall Street expectations. In its Q1 2025 results, the company posted revenue of $7.4 billion, marking a 35.9% increase from the same quarter last year and sailing past Wall Street’s forecast of $7.1 billion. 

The showstopper in this story was AMD’s data center segment, which pulled in $3.7 billion, registering a 57.2% year-over-year surge. The client and gaming segment brought in $2.9 billion. While the gaming unit struggled under pressure, sliding 29.8% to $647 million, the client business rose sharply, climbing 67.7% to reach $2.3 billion. 

The divergence between segments did not go unnoticed, yet the weight of the gains was strong enough to lift AMD’s overall gross margin to 50%, up from 47% a year earlier. A stronger product mix and swelling demand for data center chips provided a firm foundation for this margin expansion.

On the profit front, the company kept up its winning streak. Non-GAAP net income jumped 54.6% to touch $1.6 billion. Adjusted EPS also moved 54.8% higher, landing at $0.96 and ahead of analyst expectations of $0.93. In addition, AMD generated $939 million in cash from operations, while free cash flow for the quarter stood at $727 million.

Peering into the second quarter of 2025, management expects revenue to hover around $7.4 billion, plus or minus $300 million. This includes a projected $700 million revenue reduction stemming from a new export license affecting MI308 shipments to China. Still, the midpoint implies 27% growth over the previous year. 

Analysts, however, expect some softness in profitability for the Q2 2025, projecting a 30% decline in EPS to $0.35. Yet the broader picture remains encouraging. For the full fiscal year 2025, the bottom line is expected to climb 20.6% from the previous year to $3.16. Looking further ahead, fiscal year 2026 is forecast to deliver even stronger growth, with EPS projected to rise 54% to reach $4.87.

What Do Analysts Expect for Advanced Micro Devices Stock?

AMD holds its ground with quiet conviction, earning a “Moderate Buy” consensus that reflects solid confidence from the analyst community. Among the 42 analysts tracking the stock, 28 issue a “Strong Buy,” one backs a “Moderate Buy,” and 13 advise to “Hold.” 

The average price target of $133.32 represents potential upside of 5.5%. The Street-high price target of $200 implies shares could gain nearly 60% from here.