AMD stock is up 170% in 2026, driven by two record data center quarters and a Meta deal for up to 6 gigawatts of Instinct GPUs. Second-quarter revenue rose 50% to $11.5 billion, data center sales more than doubled to $6.7 billion, and AMD guided to about $13 billion for the third quarter. Analysts expect normalized EPS to rise from $7.61 this year to $15.85 in 2027, while the forward P/E has fallen from a 67x peak to 50x. The author sees the main risk as AMD helping fund some of its own demand through a lease guarantee, up to $5 billion pledged to Anthropic, and warrants of up to 160 million shares apiece for OpenAI and Meta. The author judges AMD isn't too late to buy, with the Nov. 3 report as the key test.
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24/7 Wall St. rates AMD Hold with a 12-month price target of $542.87, while shares trade at $549.58, implying about 1.2% downside. The stock is up 156.62% year to date after falling 12.85% over the past month, and Q2 revenue rose 50.1% to $11.54B, with EPS of $1.66 beating estimates. Data Center revenue reached $6.72B last quarter, 58% of sales, and the division is expected to more than double year over year in 2027. The article's bull case reaches $688.72 and its bear case $430.83, with risks including a 31% drop in Gaming revenue and a 9.89% decline in free cash flow to $1.56B. The article says much of the Helios ramp is already reflected in the valuation, and the rating could shift if Q3 Data Center results show faster Helios shipments.
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A $10,000 investment in AMD made on October 27, 2025, was worth about $22,280 at the market close on October 28, 2026, while the S&P 500 returned 14.0% over the same period. Data center revenue became the main driver, accounting for 58% of sales in the quarter ended June 2026, up from 42% a year earlier, and reaching a record $6.7 billion. The article argues that signs were visible before the run, including the October 6, 2025 OpenAI agreement to deploy 6 gigawatts of AMD GPUs. AMD kept adding customers, including Anthropic with up to 2 gigawatts of MI450 chips and Meta, which will use AMD Helios rack systems. Management expects data center revenue to more than double in 2027, though this is a forecast rather than a result.
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AMD now highlights Helios, a full rack-scale AI platform combining EPYC Venice CPUs and MI450 series GPUs, rather than the MI300X it emphasized in its October 29, 2024 call. On its August 4, 2026 call, management said Anthropic will deploy up to 2 gigawatts of MI450 series GPUs in Helios, with the first gigawatt starting in the first half of 2027. The Data Center segment brought in $16.6 billion in fiscal 2025, or 48.0% of revenue, and in fiscal Q2 2026 data center revenue grew 107% to $6.7 billion. Helios is not yet included in reported figures, as initial shipments were expected to begin later in the third quarter, so investors are partly paying for a product with no reported sales. The article says the shift looks more reassuring than concerning and points to data center revenue for fiscal Q3 2026, expected in November 2026, as the key figure to watch.
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The article compares AMD with two AI companies, Cerebras Systems (CBRS) and Marvell Technology (MRVL). Cerebras makes an oversized chip designed to speed up AI computing; in Q2 2026, its core revenue more than doubled year over year, cloud revenue nearly quadrupled, and remaining performance obligations (RPO) reached $25.4 billion. Management expects core revenue to more than triple in 2027, after guiding for $880 million to $890 million this year. Marvell supplies custom chips and high-speed connectivity for AI data centers and targets $70 billion to $90 billion in revenue by fiscal 2031, up from $8.2 billion in fiscal 2026. Market caps are about $829 billion for AMD, $195 billion for Marvell and $26 billion for Cerebras; the article says Marvell has an established business, while Cerebras is higher-risk, with customer concentration among its risks.
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The author argues that AMD's stock already prices in much of its expected growth, even though data center revenue rose 107% year over year in Q2. Shares trade at 136 times trailing earnings and 33.5 times next year's earnings, compared with 27 times for Nvidia. The author expects the stock to stay roughly flat for about a year or more while business results catch up. He suggests investors with large gains may consider selling, and that now is probably not the best time for new buyers.
- I Think AMD’s Potential Is Actively Being Underestimated So I Keep Betting On It
The author argues the market still prices AMD as an underdog despite steady hyperscaler deals and strong results. AMD sells EPYC server CPUs and Instinct AI GPUs, now bundled in a full Helios rack, with OpenAI (6 gigawatts), Meta (up to 6 gigawatts) and Anthropic (up to 2 gigawatts) named as customers. Q2 FY2026 revenue rose 50.1% to $11.54 billion, with Data Center revenue up 107% to $6.718 billion, and management guided Q3 revenue to roughly $13 billion. Non-GAAP operating margin expanded to 27% from 12%, and debt-to-equity stands at 0.071. The main risks cited are valuation at a P/E of 208, a 17.31% share drop after the Q4 2025 report, and tight server CPU supply.
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