Shares of Advanced Micro Devices (AMD) and Arm Holdings (ARM) rallied about 13% and 12% at the time of writing on Friday, as chipmaker Intel’s (INTC) strong Q1 results and outlook reflected robust AI-led demand for CPUs (central processing units). Meanwhile, Intel stock soared 25% as investors cheered the company’s turnaround. AMD stock also gained from a rating upgrade by D.A. Davidson analyst Gil Luria to Buy from Hold.
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“We view Intel’s results as a precursor for a huge step-up for AMD’s CPU franchise and believe the structural shift toward agentic AI workloads is creating unprecedented demand for server CPUs,” said Luria. The analyst boosted his price target for AMD stock to $375 from $220.
D.A. Davidson Turns Bullish on AMD Stock
Luria cited the “structural increase” in CPU demand on top of notable improvement in the visibility into AMD’s position in the data center buildout. The 4-star analyst believes that the extent of Intel’s Q1 beat indicates significant upside to AMD’s estimates, beginning with the March quarter, results for which are scheduled on May 5.
In particular, Luria noted that agentic AI workloads have moved computing needs beyond GPUs (graphics processing units), driving growth in the CPU market. In this regard, the analyst noted that Intel CFO David Zinsner highlighted the expectation for the industry to grow by double-digits, with momentum expanding into 2027. “By Intel CEO Tan’s assessment, the ratio of GPUs to CPUs will go from 8 to 1 for pretraining closer to parity for agentic workloads,” said Luria.
Furthermore, Luria believes that AMD is well-positioned to significantly boost its prices across the portfolio to support and enhance margins, given his expectation that demand will exceed supply for the foreseeable future. The analyst raised his 2026 estimates for AMD by $2 billion for revenue and $1.5 billion for gross profit, significantly above guidance and consensus. Despite AMD’s lower share in the CPU market, the analyst is optimistic about these estimates due to tight supply.
Is AMD Stock a Buy or Sell Now?
Heading into Q1 earnings, Wall Street has a Strong Buy consensus rating on Advanced Micro Devices stock based on 21 Buys and seven Holds. The average AMD stock price target of $285.04 indicates about 15% downside risk. AMD stock has surged about 59% year-to-date (as of writing).
