Advanced Micro Devices (NASDAQ:AMD) stock enjoyed a huge bounce last week, and in a somewhat ironic twist, can thank Intel, its rival in the AI chip market, for the boost.
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Intel’s Q1 2026 earnings demonstrated the “growing and essential role” of CPUs in the AI story, according to management, supported by the company’s data center revenue growth of 22%. The news bodes well for AMD in the week before it releases its Q1 2026 numbers.
Overall, AMD shares climbed about 25% over the past week, building on a rally that has already lifted the stock 62% year-to-date and 268% over the past year.
Despite these gains, top investor Yiannis Zourmpanos doesn’t think the bull run has yet to fully run its course.
“I continue to believe that risk/reward for AMD is still skewed towards the positive side at current levels since estimates clearly have not yet adjusted for any significant change in the demand cycle,” states the 5-star investor, who is among the top 1% of stock pros covered by TipRanks.
Zourmpanos notes that CPU demand is outpacing the supply, meaning that pricing power will be coming into play. The investor believes this trend is only set to continue as inference and agentic AI becomes more and more prominent and CPUs become “central orchestration engines.”
The need for quick decision-making will increase CPU density per AI deployment, points out the investor, citing estimates that would shift the CPU-to-GPU ratio from 1:4–1:8 to 1:1–1:2.
“If the total addressable market is expanding as well as the percentage of revenue from CPUs with higher ASPs growing, AMD has ample room to improve its results,” he adds.
And yet, despite the sunnier forecast, AMD’s share price doesn’t fully incorporate the vast opportunity, argues Zourmpanos. He suggests that it’s quite realistic for AMD to reach a 50% share in the server CPU segment (it has roughly 40% at present), among other revenue drivers, which could boost AMD by over 30% in the coming year.
“The CPU cycle has fundamentally switched, and AMD is the most obvious beneficiary,” concludes Zourmpanos, who rates AMD a Strong Buy. (To watch Zourmpanos’ track record, click here)
Wall Street largely agrees with the bullish view, but the valuation is starting to raise eyebrows. AMD carries a Strong Buy consensus backed by 21 Buy ratings and 7 Holds, yet after the stock’s relentless run higher, the math is getting harder to justify. At $295.04, the average price target now points to 15% downside over the next 12 months. (See AMD stock forecast)
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.