AMD shares at highs – test of 575 USD and potential decline towards 420 USD

A strong AMD report has eased some concerns about the sustainability of the business; however, signs of overheating are already becoming visible. The 2026 forecast allows for a test of 575 USD, followed by a possible decline towards 420 USD.

Advanced Micro Devices Inc. (NASDAQ: AMD) released its Q1 2026 results, confirming that the record Q4 2025 was not a one-off spike. After the previous quarter, investors had questioned how sustainable the growth was, as part of the result had been supported by MI308 sales to China and the release of inventory reserves. Q1 2026 partially alleviated these concerns, as revenue remained close to the record Q4 level, while the Data Centre segment continued to expand, supported by strong demand for EPYC server processors and Instinct AI accelerators.

At the same time, the report cannot be described as flawless. Compared with Q4 2025, earnings per share, operating profit, and gross margin declined, while the Client, Gaming, and Embedded segments showed weaker momentum. Such performance indicates increasing reliance on the Data Centre segment, which now serves as the primary driver shaping market perception of the company.

Confident guidance for Q2 2026 supported the advance in AMD shares. The company expects further revenue growth and margin improvement. As a result, AMD retains its position as one of the key growth names in the semiconductor sector; however, elevated dependence on the Data Centre segment makes the upcoming quarters particularly important in assessing the sustainability of growth.

This article examines Advanced Micro Devices, outlines the key sources of its revenue and the products it offers in the AI market. It also provides a fundamental analysis of AMD, along with a technical analysis of Advanced Micro Devices shares, forming the basis for the forecast for AMD shares in 2026.

About Advanced Micro Devices, Inc.

Advanced Micro Devices, Inc. (AMD) is a US-based company founded in 1969 by Jerry Sanders and a group of fellow engineers. It designs and manufactures semiconductor devices, including processors, graphics chips, and server solutions. The company went public with an IPO on the NYSE in 1972 under the ticker AMD.

AMD is present in the rapidly expanding AI market with the following products:

• Graphics Processing Units (GPUs) for data centres: AMD produces Radeon Instinct microprocessors and has recently introduced new models in the MI series designed for high-performance computing and AI workloads. For example, the MI300 is a high-powered processor optimised for deep data analysis and large AI models.
• Radeon Open Compute (ROCm) software: AMD has developed an open-source software platform, ROCm, providing tools for AI development and high-performance computing on the company’s GPUs.
• Field-Programmable Gate Arrays (FPGAs): following the acquisition of Xilinx, AMD expanded into FPGAs, which are widely used for AI applications, including signal processing and adaptive computing.
• Central Processing Units (CPUs): AMD also optimises its EPYC series processors to support AI computing in server solutions.
• Products for end devices: in addition to server solutions, AMD develops specialised GPUs and FPGAs for AI-powered end devices, such as autonomous vehicles, smart cameras, and medical equipment.

Advanced Micro Devices, Inc.’s main revenue streams

AMD’s revenue is generated from four key segments:

1. Data Center: includes EPYC server processors, AMD Instinct graphics accelerators for AI and scientific computing, and Xilinx FPGA solutions for specialised workloads in data centres.

2. Client segment: includes Ryzen and Athlon processors for desktop PCs and laptops, delivering high performance for general users and enthusiasts, and integrated graphics solutions for hybrid devices.

3. Gaming segment: includes Radeon GPUs for gaming PCs, integrated solutions for gaming laptops, and custom processors for gaming consoles such as PlayStation and Xbox.

4. Embedded segment: covers high-performance processors and graphics solutions for embedded systems in automotive electronics, industrial automation, medical devices, and telecommunications.

Advantages of Advanced Micro Devices, Inc. in the semiconductor market

AMD has several strengths that enable it to compete effectively with key industry players, including Intel Corp. (NASDAQ: INTC) and NVIDIA Corp. (NASDAQ: NVDA). The company’s main advantages are outlined below:

• Processor architecture: AMD introduced the Zen architecture, which significantly enhanced performance and energy efficiency. The Ryzen (consumer) and EPYC (server) series have gained popularity thanks to their excellent performance-to-price ratio. In recent years, AMD has overtaken Intel in processor core and thread counts.
• Multi-core and multi-threaded solutions: AMD typically offers more cores and threads at the same price point, making its processors particularly attractive to users who require multitasking and high-performance computing (for example, for graphics, video editing, and data streaming).
• Innovations in graphics technology: although AMD still trails behind NVIDIA in certain high-performance GPU features, it holds a strong position thanks to its processors’ high data-processing throughput, offering a competitive price-to-performance ratio. With the RDNA and RDNA 2 series, AMD has made significant strides in improving the energy efficiency and performance of its graphics cards.
• EPYC server solutions: AMD’s EPYC line delivers an impressive performance-to-price ratio in the server segment, gaining traction among large corporations and data centres. These processors support more core counts per socket, reducing scaling costs for server infrastructure.
• CPU and GPU integration: AMD manufactures both processors and graphics chips, allowing it to develop integrated solutions for laptops and gaming consoles. For example, AMD supplies processors for PlayStation and Xbox consoles, which ensures a stable revenue stream and reinforces its market presence.
• Competitive pricing: AMD frequently offers lower-priced alternatives to Intel and NVIDIA, making its products attractive to a broader customer base, from enthusiasts to corporate clients.
• Rapid adoption of new technological processes: AMD collaborates with TSMC to swiftly implement advanced process nodes (such as 7 and 5 nm), enhancing energy efficiency and performance across its processors and graphics chips.

Advanced Micro Devices, Inc. Q3 2024 financial results

AMD released its Q3 2024 earnings report on 29 October, confirming continued revenue and net income growth. Below are the report’s key figures:

• Revenue: 6.82 billion USD (+18%)
• Net income: 0.77 billion USD (+158%)
• Earnings per share: 0.47 USD (+161%)
• Operating profit: 0.72 billion USD (+223%)

Revenue by segment:

• Data Center: 3.55 billion USD (+122%)
• Client segment: 1.88 billion USD (+29%)
• Gaming segment: 462 million USD (–69%)
• Embedded segment: 927 million USD (–25%)

AMD benefited substantially from AI advancements, reflected in its Data Center segment, where revenue surged 122%, contributing to 52% of total revenue. The Gaming segment suffered the steepest decline (–69%), making it the weakest performer.

For Q4 2024, AMD projected revenue in the 7.20–7.80 billion USD range, with an average estimate of 7.50 billion. This implied a 22% year-on-year increase and a 10% rise compared to Q3 2024. However, the forecast fell slightly short of analysts’ expectations, sparking investor concerns, particularly amid intensifying competition in the AI market and a broader slowdown in segment growth.

Advanced Micro Devices, Inc. Q4 2024 financial results

AMD released its Q4 2024 earnings report on 4 February, showing a 37% decline in net income. The report highlights are outlined below:

• Revenue: 7.65 billion USD (+24%)
• Net income: 0.48 billion USD (–37%)
• Earnings per share: 0.29 USD (+29%)
• Operating profit: 0.87 billion USD (+155%)

Revenue by segment:

• Data Center: 3.86 billion USD (+69%)
• Client segment: 2.31 billion USD (+58%)
• Gaming segment: 563 million USD (–59%)
• Embedded segment: 923 million USD (–13%)

2024 financial performance:

• Revenue: 25.78 billion USD (+14%)
• Net income: 1.64 billion USD (+92%)
• Earnings per share: 1.00 USD (+88%)
• Operating profit: 1.90 billion USD (+375%)

In Q4 2024, AMD CEO Lisa Su highlighted the company’s impressive performance, reporting a record annual revenue of 25.80 billion USD, up 14% from the previous year. This growth was mainly driven by a 94% surge in Data Center revenue and a 52% increase in the Client segment. Su also emphasised that AMD prioritises total revenue rather than the number of processors shipped, particularly amid concerns about potential CPU oversupply in the PC market.

The company attributed the decline in Q4 net income to a 17% rise in operating costs, primarily driven by higher research and development investments, especially in AI. Additionally, despite strong Data Center growth, AI GPU sales fell short of expectations, further impacting profitability.

For Q1 2025, AMD expects revenue of 7.10 billion USD, slightly exceeding analysts’ projections. However, Su warned about a potential slowdown in AMD Data Center sales, citing heightened competition, particularly from NVIDIA (NASDAQ: NVDA) in the AI processor market.

AMD management remains optimistic about 2025. Su projects strong double-digit growth in both revenue and EPS for the year. She also highlighted the long-term potential of AMD’s Data Center AI business, which generated over 5.00 billion USD in 2024 and is expected to eventually drive annual segment revenue into the tens of billions of dollars.

AMD management’s sentiment was cautiously optimistic, focusing on leveraging the company’s strengths in AI and computing to drive future growth while remaining agile in response to market shifts in weaker segments.

Advanced Micro Devices, Inc. Q1 2025 financial results

AMD released its Q1 2025 report on 6 May. Below are its highlights compared to the corresponding period in 2024:

• Revenue: 7.44 billion USD (+36%)
• Net income: 0.71 billion USD (+476%)
• Earnings per share: 0.44 USD (+529%)
• Operating profit: 0.81 billion USD (+2,139%)

Revenue by segment:

• Data Center: 3.67 billion USD (+57%)
• Client segment: 2.29 billion USD (+68%)
• Gaming segment: 647 million USD (–30%)
• Embedded segment: 823 million USD (–3%)

AMD’s Q1 2025 financial performance strengthened confidence in the company as one of the leaders in the AI and data centre segment. AMD exceeded Wall Street expectations, reporting a 36% increase in revenue and a 476% rise in net income. Meanwhile, the key segments showed even stronger growth. The data centre segment increased sales by 57%, while PC processor revenue rose by 68%, driven by sustained demand for EPYC server processors, Instinct accelerators, and Ryzen chips for consumer PCs.

For Q2 2025, AMD management projected revenue to range between 7.1 and 7.7 billion USD but cautioned about potential losses of approximately 800 million USD, as the company might postpone or entirely abandon the sales of a significant amount of its AI chips in China. The reason is the new export restrictions imposed by the US government, which have banned exports of advanced technology to the Chinese market. As a result, these chips cannot be sold, and their cost will likely be written off as losses. However, AMD management warned about this as early as 16 April, so this information was most likely already factored into the current stock price. For 2025, CFO Jean Hu estimated revenue losses of 1.5 billion USD due to export restrictions.

Nevertheless, AMD management remained optimistic about 2025. The company anticipated double-digit growth in both revenue and EPS for the year, driven by its expanding AI portfolio and strategic partnerships. This signalled that AMD’s long-term potential remained promising despite external risks and short-term stock volatility.

Advanced Micro Devices, Inc. Q2 2025 financial results

AMD released its Q2 2025 earnings report on 5 August. Below are its highlights compared to the corresponding period in 2024:

• Revenue: 7.69 billion USD (+32%)
• Net income: 0.78 billion USD (–31%)
• Earnings per share: 0.48 USD (–30%)
• Operating profit: 0.90 billion USD (–29%)

Revenue by segment:

• Data Center: 3.24 billion USD (+14%)
• Client segment: 2.49 billion USD (+67%)
• Gaming segment: 1.12 billion USD (+73%)
• Embedded segment: 824 million USD (–4%)

AMD ended Q2 2025 with record revenue of 7.7 billion USD, up 32% year-over-year. However, profitability was under pressure due to a one-time write-down of approximately 800 million USD, related to inventory and obligations tied to MI308 shipments to China, impacted by US export restrictions. This resulted in a decline in GAAP gross margin to 40% and non-GAAP margin to 43%. According to the company, the margin would have been around 54% without the write-down. The result was supported by record sales of EPYC server processors and Ryzen desktop processors, as well as a revival in the Gaming segment. However, the hit to margins and GAAP operating loss reminded the market of regulatory risks surrounding AI accelerators.

AMD’s segments delivered the following results: the Data Center segment generated approximately 3.2 billion USD in revenue, up 14% y/y, driven by EPYC sales, partially offsetting the impact of restrictions on the MI308. The Client and Gaming segments together contributed around 3.6 billion USD, with the Client segment reaching 2.5 billion USD, fuelled by strong demand for Zen 5-based desktop processors and a more favourable product mix. The Gaming segment rose to 1.1 billion USD, boosted by higher shipments of semi-custom chips for consoles and steady demand for Radeon GPUs. The Embedded segment generated 824 million USD, down 4% year-on-year, reflecting mixed demand across end markets. The company stated that it had achieved record free cash flow for the quarter, providing an additional cushion for AI investments.

The outlook for Q3 FY25 was confident. The company expected revenue of 8.7 billion USD ± 300 million USD, representing around 28% year-over-year growth and approximately 13% sequential growth, with a projected non-GAAP gross margin of about 54%. AMD had not included MI308 shipments to China in its Q3 guidance, as the issue was still under review by the US government. It was later reported that a scheme had been agreed under which AMD would obtain export licences for the MI308 in exchange for remitting 15% of revenue from sales in China.

Advanced Micro Devices, Inc. Q3 2025 financial results

AMD published its Q3 2025 financial results on 4 November 2025. The key figures, compared with the same period in 2024, are as follows:

• Revenue: 9.25 billion USD (+36%)
• Net income (non-GAAP): 1.97 billion USD (+31%)
• Earnings per share: 1.20 USD (+30%)
• Operating profit: 2.24 billion USD (+31%)

Revenue by segment:

• Data Centre: 4.34 billion USD (+22%)
• Client segment: 2.75 billion USD (+46%)
• Gaming segment: 1.30 billion USD (+181%)
• Embedded segment: 857 million USD (–8%)

AMD reported a strong Q3 2025, beating market expectations. Adjusted (non-GAAP) revenue reached 9.25 billion USD, up 36% year-on-year, while adjusted earnings per share rose by 30% to 1.20 USD. This was slightly above analyst forecasts, which had anticipated revenue of 8.7–8.8 billion USD and EPS of 1.17 USD.

The gross margin remained high at 54%, indicating stable profitability and a recovery following a weak Q2 2025. Operating profit totalled 2.2 billion USD, with a margin of 24% – slightly below last year’s figure due to increased spending on research and development and promotion of AI products. AMD’s balance sheet remains healthy, with 7.2 billion USD in cash and investments against 3.2 billion USD in debt, resulting in a net cash position. This indicates that the company is not reliant on borrowing.

The main growth driver for the quarter was the Data Centre segment, where revenue rose to a record 4.3 billion USD (+22% y/y), supported by strong sales of EPYC server chips and Instinct MI350 accelerators. The Client and Gaming businesses together generated approximately 4 billion USD (+73% y/y): the Client segment grew to 2.8 billion USD following robust Ryzen sales, and Gaming rose to 1.3 billion USD, driven by GPUs and console solutions. The Embedded segment was the only weak spot, declining by 8% to 0.86 billion USD.

For Q4 2025, management forecasted revenue of around 9.6 billion USD, with a possible ±0.3 billion USD deviation, implying year-on-year growth of 25%. The gross margin was expected to be approximately 54.5%. The company anticipated further increases in the Data Centre and Client segments and a gradual recovery in Embedded. The forecast did not account for sales to China due to uncertainty surrounding export restrictions.

Additionally, AMD outlined a new strategic plan for the next three to five years. The company targeted average annual revenue growth of more than 35%, an operating margin above 35%, and earnings per share exceeding 20 USD. For Data Centres, AMD targeted annual growth of over 60%, while other segments were expected to grow by more than 10%. Effectively, AMD indicated that in 2026 its focus would remain on AI accelerators and server processors, which are set to become the company’s primary sources of future growth.

Advanced Micro Devices, Inc. Q4 2025 financial results

AMD released its Q4 2025 results on 3 February. Below are the key figures compared with the same period in 2024:

• Revenue: 10.27 billion USD (+34%)
• Net income (non-GAAP): 2.52 billion USD (+42%)
• Earnings per share: 1.53 USD (+40%)
• Operating profit: 2.85 billion USD (+41%)

Revenue by segment:

• Data Center: 5.38 billion USD (+39%)
• Client segment: 3.10 billion USD (+34%)
• Gaming segment: 0.84 billion USD (+50%)
• Embedded segment: 950 million USD (+34%)

AMD’s report appeared strong on an absolute basis, yet the market reaction was negative. The company posted revenue of 10.27 billion USD (+34% year-on-year), exceeding analysts’ expectations of 9.65–9.7 billion USD. Non-GAAP earnings per share came in at 1.53 USD versus the expected 1.32 USD. Overall, 2025 became a record year for AMD in terms of both revenue and profit, driven primarily by robust growth in the Data Center segment and stable demand for EPYC server processors and consumer Ryzen chips.

Guidance for Q1 2026 also came in above expectations. The company projected revenue of 9.8 billion USD (±300 million USD), while the market had been expecting approximately 9.4 billion USD. Such guidance indicated that AMD continued to see strong demand in AI and server solutions. Management emphasised expectations for further expansion in the AI Data Centre business, including EPYC processors and Instinct accelerators, and outlined plans to increase shipments to large enterprise and cloud customers in 2026.

Despite the strong headline figures, the shares declined, as investors questioned the sustainability of part of the revenue base. Q4 revenue included one-off factors: 390 million USD from MI308 chip sales to China and 360 million USD from inventory reserve releases. In Q1 2026, however, sales to China were expected to amount to only around 100 million USD due to US export restrictions. That change implied that part of the growth recorded in the previous quarter would not be repeated, and the market interpreted the shift as a potential risk of revenue deceleration in the coming quarters.

Advanced Micro Devices, Inc. Q1 2026 financial results

On 5 May, AMD released its Q1 2026 results. Below are the key figures compared with the same period in 2025:

• Revenue: 10.25 billion USD (+38%)
• Net income (non-GAAP): 2.27 billion USD (+45%)
• Earnings per share: 1.37 USD (+43%)
• Operating profit: 2.54 billion USD (+43%)
• Free cash flow: 2.57 billion USD (+252%)

Revenue by segment:

• Data Center: 5.78 billion USD (+57%)
• Client segment: 2.89 billion USD (+26%)
• Gaming segment: 720 million USD (+11%)
• Embedded segment: 870 million USD (+6%)

AMD’s Q1 2026 report appeared strong, but it should be assessed alongside its record Q4 2025 results. In the previous quarter, the company reported revenue of 10.27 billion USD and non-GAAP EPS of 1.53 USD. However, part of the Q4 result was supported by one-off factors, including 390 million USD in MI308 sales to China and 360 million USD from the release of previously established inventory reserves. As a result, the key question ahead of Q1 was whether AMD could maintain a high revenue base without comparable one-off support.

Q1 2026 partially addressed those concerns. Revenue totalled 10.25 billion USD, remaining broadly stable quarter-on-quarter while rising 38% year-on-year. Non-GAAP EPS declined from 1.53 USD to 1.37 USD, falling short of the record Q4 level; however, on a year-on-year basis, performance remains strong. More importantly, the company demonstrated that the elevated revenue level was not entirely attributable to one-off factors.

The clearest confirmation of business resilience came from the Data Center segment. In Q4 2025, segment revenue reached 5.4 billion USD, increasing to 5.8 billion USD in Q1 2026. Such performance indicates that AMD’s primary growth engine continued to expand even after a high comparison base. Demand for EPYC server processors and Instinct accelerators remains the company’s main driver, and the Data Center segment has effectively become the centre of AMD’s investment narrative.

Market reaction to the report was positive. AMD shares rose by more than 18% following the release, as investors responded to a solid quarter and more confident forward guidance. The response contrasts sharply with the reaction to Q4 2025, when concerns emerged about the sustainability of revenue supported by MI308 sales to China and inventory releases. Q1 2026 results helped ease part of that scepticism.

Guidance for Q2 2026 also came in strong. AMD expects revenue of approximately 11.2 billion USD, plus or minus 300 million USD, implying year-on-year growth of 46%. Non-GAAP gross margin is projected to be around 56%, above the Q1 2026 level. Such expectations signal continued expansion in the Data Center business, where demand for server processors and AI accelerators remains the core growth driver.

At the same time, the report was not without weaknesses. Compared with Q4 2025, total revenue was broadly flat, non-GAAP EPS declined from 1.53 USD to 1.37 USD, and non-GAAP operating profit decreased from 2.85 billion USD to 2.54 billion USD. In addition, the Client, Gaming, and Embedded segments declined quarter-on-quarter, reinforcing AMD’s increasing reliance on Data Center. As a result, the company’s current investment case is becoming increasingly concentrated on the server business and AI infrastructure.

Valuation multiples analysis for Advanced Micro Devices, Inc.

Below are the key multiples for Advanced Micro Devices, Inc., based on the Q1 2026 financial year results, calculated at a share price of 516 USD.

Valuation multiples analysis for Advanced Micro Devices, Inc. – conclusion

Based on current valuation multiples, AMD shares do appear expensive. However, in AMD’s case, the elevated valuation reflects the market’s view of the company as one of the key players in server processors and artificial intelligence chips.

Investors are willing to pay a premium for AMD because they expect further business expansion, profit growth, and strengthening competitive positions in the rapidly growing semiconductor market.

High valuation multiples, therefore, should not be viewed solely as a weakness. On the one hand, they clearly indicate a limited margin of safety. On the other hand, such elevated valuations are often assigned to companies that the market expects to deliver strong growth.

As long as AMD continues to confirm these expectations through revenue and earnings growth, the high valuation may remain justified, and the shares could continue to advance. However, risk remains elevated. If business growth slows or investors become disappointed in the development of the AI segment, the expensive valuation could quickly become the primary source of downward pressure on the shares.

Expert forecasts for Advanced Micro Devices, Inc.’s stock

• Barchart: 35 out of 45 analysts rated the shares as Strong Buy, 2 as Moderate Buy, and 8 as Hold. The upper price target is 665 USD, and the lower bound is 280 USD.
• MarketBeat: 32 out of 44 analysts assigned a Buy rating, and 12 recommended Hold. The upper price target is 665 USD, and the lower bound is 235 USD.
• TipRanks: 27 out of 35 analysts assigned a Buy rating, and 8 recommended Hold. The upper price target is 665 USD, and the lower bound is 250 USD.
• Stock Analysis: 36 out of 51 analysts rated the shares as Strong Buy, 5 as Buy, and 10 as Hold. The upper price target is 665 USD, and the lower bound is 225 USD.

Advanced Micro Devices, Inc. stock price forecast for 2025

On the weekly chart, Advanced Micro Devices shares are trading significantly above the 200-period moving average. In addition, the Stochastic indicator is in overbought territory near the 95 level, signalling pronounced overheating. The reason lies in the magnitude of the recent advance: over the past two months, AMD shares have risen from 200 USD to 540 USD without any meaningful correction. After such a move, the probability of further upside without a pullback diminishes. A corrective phase may be required before the next upward wave develops. Otherwise, momentum-driven gains could persist, but the risk of a sharp reversal would increase as market participants begin to take profits.

Based on the current price structure of AMD shares, the potential scenarios for 2026 are as follows:

The primary forecast for Advanced Micro Devices shares assumes a test of resistance at 575 USD, followed by a reversal from that level and a decline towards support at 420 USD. At that level, the correction is expected to conclude, with the broader uptrend resuming thereafter.

Risks of investing in Advanced Micro Devices, Inc. stock

When investing in AMD shares, it is essential to consider the following risks:

• Intense competition: AMD faces tough competition from Intel Corp. (NASDAQ: INTC) and NVIDIA, which may lower prices or accelerate the introduction of new technologies, potentially impacting AMD’s market share negatively.
• Reliance on TSMC: AMD relies on TSMC to manufacture its chips. Any supply disruptions or delays in the introduction of new technology processes at TSMC (NYSE: TSM) could affect AMD’s market position.
• Demand fluctuations: the PC and server market is cyclical and depends on macroeconomic conditions. A decrease in device demand may reduce AMD’s revenue.
• Development of proprietary AI chips by consumers: large tech companies like Amazon, Google, and Microsoft are investing in the development of their semiconductors for data centres and specialised tasks. This reduces their reliance on external suppliers, including AMD. If these corporations continue to increase spending on developing their proprietary chips, it could limit AMD’s overall market, reduce its share in the data centre segment, and slow its revenue growth over the long term.
• High share valuation: AMD shares trade at elevated multiples, as the market has already priced in strong growth in the Data Center and AI segments. Such expectations continue to support the share price as long as the company delivers in line with projections. However, if revenue or earnings growth begins to slow, the current valuation premium could quickly turn into a source of risk and amplify downside pressure.

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