Advanced Micro Devices provided a first-quarter performance and forward-looking outlook that exceeded analysts' expectations, prompting major brokerage upgrades and a sharp rally in the stock.
In the quarter, AMD posted revenue of $10.25 billion and earnings per share of $1.37, outpacing Wall Street estimates of $9.9 billion and $1.28, respectively. The company highlighted a strong showing in its datacenter business, where revenue reached $5.78 billion, up 57% year-over-year and driven by demand for server CPUs.
Management set a second-quarter revenue target of $11.2 billion, notably above the Street estimate of $10.5 billion. AMD said it expects datacenter revenues to increase by double digits sequentially and projected server CPU revenue growth of more than 70% year-over-year for the quarter.
Following the results and the upbeat outlook, AMD shares jumped 18% in premarket trading on Wednesday.
Analyst reactions and rating changes
Goldman Sachs responded by upgrading AMD to Buy and raising its 12-month price target to $450 from $240. Goldman analyst James Schneider cited structural tailwinds from the spread of agentic AI in both enterprise and consumer workloads as a key driver behind the move.
"We upgrade AMD to Buy with a 12-month price target of $450 given tailwinds to its server CPU business we expect from agentic AI, as well as upside in datacenter GPUs in 2027 and beyond," Schneider wrote.
Schneider added that the proliferation of agentic AI across enterprise and consumer uses is likely to act as a medium-term tailwind for the server CPU market, and that AMD stands to be an "outsized beneficiary" of enterprise adoption. He also flagged the continued relevance of x86 architecture as AI agents operate alongside companies' existing x86 infrastructure.
Bernstein likewise raised its view on AMD, moving the stock to Outperform from Market-Perform and increasing its price target from $265 to $525. Bernstein's modeling reflects the expectation that AMD could earn more than $14 per share in 2027 and that earnings may approach $20 in 2028.
"Given the agentic AI boom, we believe that management’s new outlook for a doubling of their prior TAM - to a 35% CAGR by 2030 reaching ~$120B - is looking potentially plausible," analyst Stacy Rasgon wrote.
Rasgon noted continued surprise at both the strength of AMD's business and the stock's market performance, while emphasizing that the company deserves credit for an underlying fundamental story that appears to be materializing.
GPU opportunity and customer ramps
Both Goldman and Bernstein pointed to AMD's GPU business as an important secondary growth catalyst. The article's referenced analysis noted that OpenAI and Meta have announced strategic partnerships with AMD to deploy a combined 6 gigawatts of AMD GPUs. Goldman was described as particularly optimistic about the Meta deployment.
Bernstein's Rasgon observed that AMD's two anchor GPU customers are expected to ramp into year-end, and suggested those volumes may not yet be fully incorporated into Street models.
At the same time, Rasgon acknowledged a range of risks tied to the GPU story, listing uncertainties around the Helios GPU ramp, customer traction, supply constraints, second-half PC demand and the broader sustainability of AI-driven growth. Despite these caveats, Rasgon concluded that the earnings power revealed in the quarter was convincing enough to support a more positive stance on the stock, adding that the shares "probably go up from here even after the run."
Market and sector implications
The results and subsequent analyst upgrades underscore the role of datacenter demand and emergent agentic AI workloads in reshaping revenue outlooks for chipmakers. As investment firms reposition their recommendations, the semiconductor and data center equipment sectors may see follow-through moves tied to the revised expectations for server CPUs and datacenter GPUs.
The equity reaction to AMD's quarter demonstrates the sensitivity of technology stocks to a combination of near-term beat-and-raise results and long-term addressable market revisions driven by AI trends.
Summary
AMD exceeded first-quarter revenue and EPS estimates, driven by a 57% year-over-year rise in datacenter revenue. Management guided Q2 revenue well above market expectations and projected strong server CPU growth. In response, Goldman Sachs and Bernstein upgraded the stock and raised price targets, emphasizing agentic AI adoption and GPU deployments as principal catalysts while also noting execution and demand risks.