The chip designer is set to be a prime beneficiary of the artificial intelligence (AI) boom.
Shares of Advanced Micro Devices (AMD +7.69%) climbed on Wednesday after Wall Street analysts issued favorable commentary on the chipmaker’s prospects.
By the close of trading, AMD’s stock price was up more than 7%.
Image source: Getty Images.
Getting more bullish
KeyBanc analyst John Vinh expects AMD’s sales and profits to surpass consensus estimates when it reports its fourth-quarter financial results on Feb. 3.
Vinh highlighted the robust demand for AMD’s Turin data center central processing units (CPUs). Vinh believes sales are so strong that AMD is already almost sold out of server CPUs for 2026. AMD, in turn, could elect to raise prices by as much as 15% as cloud computing giants rush to secure their chip supplies.
Today’s Change
(7.69%) $17.84
Current Price
$249.76
Key Data Points
Market Cap
$378B
Day’s Range
$235.78 – $252.89
52wk Range
$76.48 – $267.08
Volume
2.7M
Avg Vol
41M
Gross Margin
44.33%
However, Vinh says some investors still question whether AMD can compete effectively with larger rival Nvidia in the advanced graphics processing unit (GPU) arena. Vinh says comments from management on AMD’s upcoming conference call regarding customer wins and production schedules could help to assuage these concerns.
AI-driven gains
Bernstein analyst Stacy Rasgon is also growing more optimistic about AMD’s server-related business and upcoming Q4 report. Rasgon thinks sales of AMD’s high-performance Epyc processors could surge by 30% in 2026.
Notably, Rasgon expects AMD’s artificial intelligence (AI)-related sales to benefit from its partnership with OpenAI beginning in the second half of the year.
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.