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Years in the Making, AMD’s Upside Movement Has Just Begun

Written by Thomas Hughes. Publication Date: 5/6/2026.

It has been years in the making, but Advanced Micro Devices (NASDAQ: AMD) is now positioned to accelerate revenue and sustain strong growth for years as it becomes the spokes to NVIDIA’s (NASDAQ: NVDA) hub. NVIDIA’s GPUs and AI infrastructure offer many advantages and will continue to drive AI adoption. However, Advanced Micro Devices GPUs, particularly the MI450 line set to launch this year, also offer advantages that are reshaping the AI landscape.

NVIDIA has the first-mover advantage and strong positioning, since its stack was well developed before the AI boom, effectively helping create it, and is best suited for high-power, rapid model training and the proliferation of AI.

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NVIDIA’s products do have drawbacks, including cost, operating expense, and utility across workloads. Those are areas where MI450s and Helios rack-scale systems excel. Advanced Micro Devices is well positioned to benefit from NVIDIA’s dominance in AI training, as a single NVIDIA AI factory can produce enough AI models to support many AMD-based inference centers.

In this environment, NVIDIA’s revenue growth can easily be outpaced, and there is evidence that the shift is already underway. Hyperscalers including Oracle (NASDAQ: ORCL), Meta (NASDAQ: META), OpenAI, Microsoft (NASDAQ: MSFT), and Google (NASDAQ: GOOGL) have either committed to Advanced Micro Devices products, with deployments expected to begin in Q3 this year, or are preparing for them by planning for smooth system integration. The common denominators are choice, cost, and purpose, as these systems are being blended into an integrated ecosystem capable of massive inference.

AMD Rockets Higher: Business Is Good for Training and Inference

Advanced Micro Devices' Q1 earnings results were a blowout, with revenue growth accelerating to 37.8% and beating the consensus estimate by more than 300 basis points. Strength was seen in both CPUs and GPUs, confirming the momentum foreshadowed by Intel (NASDAQ: INTC) and driven by broad-based demand. The key takeaway is that AMD is well positioned not only to deliver GPUs, but also to supply the CPUs needed to power AI workloads across use cases. The Data Center segment led the way, rising more than 50%, followed by a 23% increase in Client & Gaming and a 6% gain in Embedded.

Margins were another area of strength. The company faced margin pressure, but managed it well, producing $1.5 billion in GAAP operating income, $2.5 billion in adjusted operating income, and $1.37 in adjusted earnings per share (EPS). Adjusted EPS increased 185% from the prior year, outpacing consensus by more than 600 basis points, and is expected to remain strong in the coming quarters.

The guidance was solid, and that may be understating it. Typically cautious, Lisa Su said growth will accelerate meaningfully in the coming quarters, forecasting high-single-digit sequential growth in Q2, an acceleration to 46% year over year, and continued strength. MI450 and Helios will be catalysts in the upcoming quarters, driving significant growth, as she also said customer engagement exceeds company expectations. Looking ahead, Su also raised the long-term target, doubling her view of the CPU addressable market to $120 billion.

Advanced Micro Devices Valuation Is Way Out of Whack: Significant Upside Expected

It may take time, but Advanced Micro Devices' revenue is on track to approach or exceed NVIDIA’s within the next few years. The company’s forward estimates appear far too low, and even the consensus as of early May suggests considerable upside remains. Compared with NVIDIA, which trades at an approximate $4.75 trillion market cap, AMD’s $570 billion market cap is a drop in the bucket, setting the stage for a 500% to 600% stock price increase over time.

The analyst response to the report has been strong, with numerous commentaries highlighting the company’s momentum and outlook, the agentic AI tailwind, and the upcoming MI450 launch. As it stands, MarketBeat tracks 41 analysts with ratings; they provide an 80% Buy-side bias, no analyst rates the stock a Sell, and the price target trend is positive. The price action is roughly aligned with the consensus figure, but high-end targets remain favorable, with Rosenblatt setting a new high of $490. That target represents 35% upside from the pre-release closing price and is unlikely to be the end of the trend.

The price action has been eye-opening, given the April advance. AMD shares surged 20% in after-hours and premarket trading, setting a fresh high near $420. The move was driven in part by options activity, so further volatility is expected.

Chasing the stock higher is risky, as whipsaws and outsized moves are likely. Critical support sits near the premarket close and could be retested before the upcoming earnings release. That’s when the real catalyst will emerge: Q3 guidance, in which Helios rack-scale systems will begin to be sold.