Earlier this week, shares of Advanced Micro Devices (NASDAQ: AMD) exploded by more than $50 a share on strong earnings and guidance. And while the stock is taking an expected breather after such an explosive move, AMD could see further upside. 

Let’s start with AMD earnings.

The company delivered an impressive first-quarter performance, posting earnings per share of $1.37, beating Wall Street expectations by eight cents. Revenue reached $10.25 billion, marking a 37.8% increase year over year and surpassing estimates by roughly $330 million. All thanks to strong demand for AI infrastructure and data center products.

Fueling more upside, CEO Lisa Su highlighted growing demand for CPUs tied to the expansion of agentic AI. In fact, during the earnings call, Su said AMD is seeing a “meaningful” acceleration in server CPU demand, signaling that enterprises are investing heavily in next-generation AI computing infrastructure.

Looking ahead, AMD expects second-quarter revenue of approximately $11.2 billion, plus or minus $300 million. That forecast is ahead of analyst expectations of about $10.52 billion. At the midpoint of guidance, the company is projecting year-over-year revenue growth of roughly 46%, underscoring the strength of demand trends across its AI and data center businesses.

Analysts are just as bullish.

According to Goldman Sachs, AMD is positioned to benefit from multiple growth drivers at once, including expanding enterprise AI adoption and increasing demand for high-performance computing solutions. The firm believes these trends could significantly expand AMD’s market opportunity over the next several years.

Jefferies analyst Blayne Curtis was just as bullish, noting that CEO Su’s comments regarding accelerating server CPU demand as the “clear highlight” of the quarter. Jefferies has a Buy rating on AMD shares with a $415 price target, citing confidence that the company can continue gaining market share in both CPUs and AI accelerators.

Sincerely,

Ian Cooper