AMD Rides on Expanding Enterprise Partner Base: More Upside to Come?

Advanced Micro Devices’ AMD 2026 prospects are expected to benefit from an expanding enterprise footprint and rich partner base. The company has been inking deals with enterprises globally that include the likes of Tata Consultancy Services (TCS), HPE, Oracle, Google, Microsoft, Alibaba and IBM, among others. 

AMD and TCS are collaborating to develop industry-specific AI and Generative AI (Gen AI) solutions. TCS will work with AMD to integrate Ryzen CPU-powered client solutions to deliver workplace transformation, while using EPYC CPUs, Instinct GPUs, and AI accelerators to modernize hybrid cloud and high-performance computing environments. The expanded collaboration with HPE is expected to boost the adoption of AMD's “Helios” rack-scale AI architecture. 

AMD’s Helios rack-scale platform is suitable for handling yotta-scale AI infrastructure. A single Helios rack can deliver up to 3 AI exaflops and is optimized for massive, energy-efficient training of trillion-parameter models. Helios comprises Instinct MI455X accelerators, EPYC “Venice” CPUs and Pensando “Vulcano” NICs for scale-out networking and the open AMD ROCm software ecosystem. Oracle Cloud Infrastructure will launch the first publicly available AI supercluster using AMD’s Helios rack design. OpenAI has selected AMD as a preferred partner to build 6 gigawatts (GW) of next-generation AI computing capacity. The rollout will begin with 1 GW of AMD Instinct MI450 GPUs in the second half of 2026.

An expanding portfolio with the launch of the Instinct MI400 series lineup, Ryzen AI 400 and AI PRO 400 Series processors for AI PCs, along with a rich partner base, bodes well for the company’s data center business. AMD envisions the data center total addressable market to hit $1 trillion by 2030, suggesting a CAGR of more than 40% from roughly $200 billion estimated in 2025. AMD expects its data center AI revenues to see a CAGR of more than 80% over the next 3-5 years, driven by strong demand for instinct GPUs (MI450 Series and Helios rack-scale solutions) and expanding clientele that includes multiple hyperscalers, as well as sovereign opportunities. Overall data center business revenues and total revenues are expected to see a CAGR of more than 60% and greater than 35%, respectively, over the same time frame.

Tough Competition Hurts AMD’s Data Center Prospects

NVIDIA NVDA and Broadcom AVGO are major competitors in the Data Center space. NVIDIA is at the center of AI computing, with its products widely used across data centers, gaming and autonomous vehicles. The company’s newer Hopper 200 and Blackwell GPU platforms are being adopted quickly as customers work to grow their AI infrastructure. 

Broadcom is benefiting from strong demand for its networking products and custom AI accelerators (XPUs). In fiscal 2025, AI revenues surged 65% to $20 billion from fiscal 2024. Broadcom’s current order backlog for AI switches exceeds $10 billion as AVGO’s latest 102-terabit per second Tomahawk 6 switch continues to gain traction. AVGO now expects first-quarter fiscal 2026 AI revenues to double year over year to $8.2 billion. AVGO’s expanding clientele, which now includes Anthropic, is a key catalyst.

AMD’s Share Price Performance, Valuation & Estimates

AMD shares have jumped 103.1% on a trailing 12-month basis, outperforming the broader Zacks Computer and Technology sector’s return of 19.1%.

AMD Stock’s Performance

AMD stock is overvalued, with a forward 12-month price/sales of 9.18X compared with the broader sector’s 7.18X. AMD has a Value Score of F.

AMD Valuation

The Zacks Consensus Estimate for first-quarter 2026 earnings is pegged at $1.20 per share, up by a penny over the past 30 days, suggesting 25% year-over-year growth.
 

Advanced Micro Devices, Inc. Price and Consensus

Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote

AMD currently carries 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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