Advanced Micro Devices (AMD) stock rallied more than 17% in Wednesday’s pre-market trading as the chipmaker impressed investors with its market-beating first-quarter results and solid Q2 guidance. The stellar performance, driven by AI-induced demand for the company’s chips, led several analysts to hike price targets and Goldman Sachs and Bernstein to upgrade their ratings, even after a strong year-to-date rally.
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Trade NVDA with leverageNotably, AMD reported a 38% rise in its Q1 2026 revenue to $10.3 billion, with the Data Center segment’s revenue surging 57% to $5.8 billion amid robust demand for AI central processing units (CPUs) and graphics processing units (GPUs).
- AMD CEO Lisa Su said that its Data Center business is now the key driver of the company’s revenue and earnings growth.
- Inferencing and agentic AI are boosting demand for AMD’s high-performance CPUs and accelerators.
- AMD expects server growth to accelerate significantly as the company increases supply to meet strong demand.
Goldman Sachs Upgrades AMD Stock to Buy
Impressed by the Q1 print, Goldman Sachs analyst James Schneider upgraded Advanced Micro Devices stock to Buy and increased the price target to $450 from $240. The analyst cited tailwinds to the company’s server CPU business from agentic AI and upside in datacenter GPUs in 2027 and beyond as the reasons for his rating upgrade.
- The analyst expects the adoption of agentic AI in enterprise and consumer workloads to act as a medium-term tailwind to the server CPU TAM (total addressable market), boosting AMD’s business. Notably, Schneider expects AMD to significantly benefit from enterprise agentic AI adoption, where he sees strength in x86.
- Schneider sees upside to AMD’s Data Center GPU revenue, with a 6 GW deployment opportunity at Meta Platforms (META) and a stable share at Microsoft (MSFT). He awaits more visibility into OpenAI’s deployments.
Schneider’s 2027 and 2028 EPS estimates are about 20% above the Street’s expectations. While Schneider continues to prefer Broadcom (AVGO) and Nvidia (NVDA) on a relative basis, he believes that AMD presents a “compelling opportunity,” given growing agentic AI adoption via server CPUs.
Bernstein Turns Bullish on AMD Stock
Bernstein analyst Stacy Rasgon upgraded AMD stock to Buy from Hold and boosted the price target to $525 from $265. The analyst stated that AMD has been continually impressing with both strong business momentum and a solid rally in its stock, backed by improving fundamentals that make the story more credible.
Given the agentic AI boom, Rasgon believes that management’s guidance of a doubling of its prior TAM (to a 35% CAGR by 2030, reaching nearly $120 billion) is looking potentially achievable. Aside from the strength in CPUs, the analyst noted that the company has a presence in the GPU market as well, with its two anchor customers – OpenAI and Meta Platforms set to ramp into year-end.
The analyst admitted that while he has been growing more positive on AMD, he stayed on the sidelines and thinks it may have been a little late to turn bullish on the stock. Nevertheless, Rasgon’s model now points to EPS of more than $14 in 2027, with EPS of $20 in 2028 looking plausible if the AI boom continues.
Is AMD Stock a Good Buy?
Overall, 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 $369.44 indicates 4% upside potential.
These ratings/price targets might be revised as more analysts react to the impressive results and outlook.
