AMD Rises 8% in a Month: Should You Buy, Sell or Hold the Stock?

Advanced Micro Devices AMD shares have risen 7.7% in the past month, outperforming the Zacks Computer and Technology sector’s return of 0.7%. The rise reflects growing investor confidence in the company’s data-center and AI growth trajectory. AMD shares have outperformed peers, including NVIDIA NVDA, Broadcom AVGO and Intel INTC, over the same time frame. While Broadcom shares have dropped 12.7%, NVIDIA and Intel have returned 3.8% and 7.1%, respectively. So, what should investors do with the AMD shares? Let’s find out.

AMD Stock’s Price Performance

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Expanding Data Center Footprint Boosts AMD’s Prospects

AMD’s expanding Data Center footprint (58% of second-quarter 2026 revenues) is driven by strong demand for EPYC server CPUs. In the second quarter of 2026, Data Center revenues jumped 107% year over year to $6.7 billion, supported by robust EPYC processor demand and the continued ramp of Instinct GPUs. AMD expects the Data Center business to more than double in 2027, while server CPU revenues are projected to increase more than 80% year over year in the second half of 2026 and more than 70% in 2027. The company also indicated that inference is overtaking training as a major source of AI compute demand, while agentic AI is creating incremental demand for both GPUs and CPUs.

Increasing confidence in the Helios and MI450 ramp is a catalyst for the company. AMD expects initial production shipments in the third quarter, followed by a significant step-up in the fourth quarter and another increase in the first quarter of 2027. Demand for 2027 has moved above AMD’s initial expectations. Helios combines MI450-series GPUs, EPYC CPUs, Pensando networking and ROCm software, while strategic relationships with OpenAI, Meta and Anthropic provide substantial visibility into multi-generation, gigawatt-scale deployments.

The Helios and Instinct roadmap should remain a major growth engine beyond 2026. AMD intends to introduce a new rack-scale AI platform every year. Following the MI450-based Helios platform, its next-generation platform is expected to combine MI500-series GPUs, Verano CPUs and Pensando networking. Customer engagement around MI500 is already strong. Longer-term engineering relationships with OpenAI, Meta and Anthropic are also influencing future MI500, MI600 and rack architectures, improving AMD’s visibility across multiple generations of AI deployments.

Moreover, improving visibility into AMD’s server CPU franchise. EPYC deployments continue to broaden across hyperscalers and enterprises, while sixth-generation EPYC Venice is expected to extend AMD’s performance and efficiency advantages. Customer demand for Venice is stronger than for any previous EPYC generation, according to management. AMD has also been increasing wafer, packaging and other supply-chain capacity to capture the accelerating demand environment. AMD estimates the server CPU market could exceed $220 billion by 2030, with agentic AI workloads becoming a major portion of the opportunity.

AI infrastructure represents AMD’s most important long-term growth opportunity. AMD expects the data-center AI accelerator market to reach roughly $1.4 trillion by 2030, while the server CPU opportunity is expected to reach approximately $220 billion. The company believes its broader compute portfolio spanning GPUs, CPUs, networking, adaptive compute and software should enable it to participate across multiple layers of this expanding AI infrastructure market.

AMD’s Earnings Estimate Revision Shows Steady Trend

The Zacks Consensus Estimate for third-quarter 2026 earnings is pegged at $1.90 per share, unchanged over the past 30 days and indicating 58.33% growth from the figure reported in the year-ago quarter. 
 

The consensus mark for 2026 earnings is pegged at $7.49 per share, unchanged over the past 30 days, suggesting 79.62% growth from 2025’s reported figure.

AMD Suffers From Stiff Competition, Supply Constraints

AMD continues to face stiff competition from NVIDIA, Broadcom and a resurgent Intel. AMD continues to face intense competition in AI accelerators and server processors from NVIDIA in AI GPUs and Intel in CPUs. Intel is aggressively working to regain server market share through its expanding Xeon roadmap, Intel Foundry and advanced packaging technologies. Broadcom is increasing competitive pressure on AMD by strengthening its position in custom AI accelerators and high-performance networking for hyperscale customers. 

Supply availability remains one of AMD’s biggest headwinds. Management said wafers, advanced process-node capacity, HBM, advanced packaging, substrates and several other components remain tight. AMD has been raising capital spending and working across its supply chain to expand capacity, but demand is still running ahead of available supply in some areas. 

Moreover, AMD acknowledged that Data Center AI and MI450 gross margins remain somewhat below the company average. Although higher-margin server CPUs and the Embedded recovery should provide offsets, AMD expects gross margin during the MI450 ramp to be slightly below its 56% third-quarter level. Thus, the mix shift toward AI accelerators could constrain percentage-margin expansion even while gross profit dollars and earnings increase substantially.

AMD Shares Trade at a Premium

AMD shares are trading at a premium, as suggested by a Value Score of F. The AMD stock is trading at a forward 12-month price/earnings (P/E) of 40.84X compared with the broader sector’s 20.73X.

AMD shares are trading at a premium compared with peers, including NVIDIA and Broadcom. Shares of NVIDIA and Broadcom are trading at a P/E multiple of 17.64 and 20.40, respectively. However, AMD is cheaper than Intel, shares of which are trading at a 58.03 P/E multiple.

AMD Stock’s Valuation

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Here’s Why AMD Stock is a Hold Now

AMD’s expanding Data Center footprint, strong EPYC demand and accelerating Instinct GPU adoption position the company well to capitalize on the rapidly growing AI infrastructure market. The company’s expectation of robust Data Center and server CPU growth in 2027 further strengthens its prospects. However, stiff competition from NVIDIA, Broadcom and Intel, persistent supply constraints and potential gross-margin pressure from the MI450 ramp remain concerns. Moreover, AMD’s premium valuation leaves limited room for execution missteps, while earnings estimates have remained unchanged recently. Therefore, despite strong AI-driven growth prospects and recent share-price momentum, investors may prefer to wait for a more attractive entry point in AMD shares. 

AMD currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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