Over the past decade, Advanced Micro Devices (AMD) has thrived, rewriting its legacy in the fiercely competitive semiconductor arena. The company has evolved from an industry underdog to a headline name in innovation, particularly in artificial intelligence (AI).

Adding another feather to its cap, in early June, AMD announced it has brought onboard the team behind Untether AI. These engineers, known for building AI inference chips that outperform rivals in both speed and energy efficiency, will now strengthen AMD’s skills in enterprise data centers and edge computing. 

Far more than just a hiring spree, the strategic agreement brings in deep expertise in AI hardware, software, compiler engineering, kernel development, and system-on-chip design, all critical in the fast-moving AI race.

The move is no isolated bet. Just weeks ago, AMD acquired silicon photonics firm Enosemi to scale its co-packaging capabilities, and days later, it snapped up open-source software player Brium. So, let us now examine whether the latest move strengthens AMD’s position as a compelling investment opportunity.

About Advanced Micro Devices Stock

Advanced Micro Devices (AMD), headquartered in Santa Clara, California, holds a market cap of $205.6 billion and leads the charge in high-performance computing. The company delivers a powerful mix of CPUs, GPUs, FPGAs, Adaptive SoCs, and deep software capabilities to build cutting-edge platforms that support cloud infrastructure, edge computing, and end-user systems.

Over the past three months, AMD has been on an upward march, posting gains of 22.5%. In just the last five trading days, the stock has leapt another 4.7%, a sharp spike that points to fresh tailwinds lifting the company higher. 

Advanced Micro Devices Surpasses Q1 Earnings

On May 6, Advanced Micro Devices lifted the curtain on its Q1 2025 earnings, and its performance beat analyst expectations. The chipmaker reported revenue of $7.44 billion, rising 35.9% year over year and exceeding Wall Street’s forecast of $7.12 billion. 

At the heart of this impressive run was the data center segment, which delivered $3.7 billion in revenue, marking a 57% surge from the same period last year. Other divisions joined the rally too. The client and gaming business generated $2.9 billion combined. While the client unit saw a dramatic upswing of 68%, bringing in $2.3 billion, the gaming segment faced continued headwinds, falling 30% to $647 million. 

Still, the gains elsewhere helped AMD widen its gross margin to 50%, a solid jump from 47% a year ago, aided by a richer product mix and stronger data center sales. Non-GAAP net income climbed 54.6% to reach $1.6 billion, reinforcing the company’s strong operational grip. Adjusted EPS came in at $0.96, up 54.8% from the prior year and again beating the Street’s projection of $0.93. 

But despite the bullish results, AMD struck a cautious tone. Management has flagged export restrictions on A.I. chips to China, estimating a $700 million revenue hit this quarter and a total impact of $1.5 billion for the fiscal year.

Even so, AMD forecast Q2 revenue at $7.4 billion. While analysts see EPS dipping 30% year over year to $0.35 in Q2, they expect it to rise 20.6% to $3.16 for the full year and jump 54.1% to $4.87 in fiscal 2026.

What Do Analysts Expect for Advanced Micro Devices Stock?

AMD stands firm in the market, demonstrating steady confidence as it secures a “Moderate Buy” consensus. Out of 42 analysts closely following the stock, 28 give it an enthusiastic “Strong Buy” rating, one leans toward a “Moderate Buy,” and 13 adopt a cautious “Hold” stance. 

The average price target of $133.32 represents potential upside of 5.6%. Meanwhile, the Street-High target of $200 hints at a 58.7% climb from current levels.