Advanced Micro Devices (NASDAQ:AMD) stock is heading into its first-quarter report next Tuesday (May 5) with investors weighing a strong run against rising expectations for its AI business. Shares have climbed about 260% over the past year, including 4% today, as confidence builds around the company’s position in data center and AI workloads.
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That leaves AMD entering the print with a higher bar to clear, as investors look for confirmation that demand for its AI accelerators and server chips can translate into another solid quarter, and whether guidance can justify the recent gains.
Helping shape those expectations, Intel’s latest strong earnings showed solid growth in its data center business, reinforcing the idea that demand tied to AI infrastructure is holding up well, particularly across server CPUs and related platforms. That trend matters for AMD, which is competing directly in the same market with its EPYC chips and increasingly with its Instinct accelerators.
Although the Instinct DC GPU segment continues to be the primary annual growth driver, its next meaningful acceleration is not expected until the second half of the year. So, in the meantime, attention has shifted toward AMD’s EPYC server CPU trajectory amid heightened interest in using these chips to improve data center compute efficiency.
Still, Deutsche Bank’s Ross Seymore, an analyst who ranks among the top 1% on Wall Street, expects the company to “express confidence” in the future growth prospects of the Instinct DC GPU business. As a result, the analyst remains confident in his call for relatively steady performance in the first half of 2026 (roughly ~$2.6 billion per quarter), followed by a sharp ramp in the second half, with growth of about +30% quarter-over-quarter in Q3 and +75% QoQ in Q4, bringing the year-end quarterly figure to around ~$6.2 billion and full-year 2026 to approximately ~$15 billion.
Elsewhere, Seymore anticipates AMD will strike an upbeat tone on Embedded, reflecting a cyclical recovery, maintain a “constructively conservative” stance on Client amid potentially stronger-than-expected PC demand, and remain cautious on Gaming as the console cycle approaches its end in 2026.
Seymore sees gross margins staying relatively steady through Q1-Q3 (around ~55%+), before easing in Q4 due to a higher Instinct mix (54.5%), while operating margins expand over the course of the year (24.5% in Q1, rising to ~31% in Q4). Taken together, the blend of structural and cyclical revenue drivers, along with operating leverage, points to potential upside to revenue and EPS (Seymore is slightly above Street estimates).
That all sounds like an endorsement from Seymore, then, but that is not actually the case.
“While we applaud this fundamental upside potential, we also believe it to be largely reflected in AMD’s share price following the recent significant appreciation,” the analyst summed up.
To this end, Seymore maintained a Hold (i.e., Neutral) rating on the shares, backed by a $250 price target, implying the stock is overvalued by 24%. (To watch Seymore’s track record, click here)
8 other analysts also remain AMD skeptics, but with an additional 19 Buys, the stock claims a Moderate Buy consensus view. However, the Street’s $296.24 average price target points to one-year losses of 15.5%. Given this discrepancy, watch out for either price target hikes or rating downgrades shortly. (See AMD stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.