Wall Street analysts reassessed Advanced Micro Devices Inc. (NASDAQ:AMD) after the chipmaker delivered stronger-than-expected quarterly results on Tuesday, even as questions emerged around the sustainability of near-term AI revenue tied to China.
AMD reported revenue of $10.27 billion, beating the Street's $9.67 billion estimate, while adjusted earnings came in at $1.53 per share, well above the consensus forecast of $1.32. Total revenue climbed 34% year over year, reflecting broad-based strength across its core businesses.
Data Center and Client Segments Drive Growth
The company's Data Center segment remained the main growth engine, with revenue rising 39% year over year to $5.4 billion. Client and Gaming revenue increased 37% to $3.9 billion, while Embedded revenue grew 3% to $950 million.
For the current quarter, AMD forecast first-quarter revenue of about $9.8 billion, which includes roughly $100 million in MI308 accelerator sales to China. That outlook is above the analyst consensus of $9.39 billion.
Analyst Ratings and Price Forecasts
Following the report, several analysts reiterated or lifted their price forecasts. Wedbush analyst Matt Bryson reiterated an Outperform rating with a $290 forecast. KeyBanc's John Vinh maintained an Overweight rating and raised his price forecast from $270 to $300. Rosenblatt's Kevin Cassidy and Cantor Fitzgerald's C.J. Muse both kept Buy or Overweight ratings with $300 forecasts, while Benchmark's Cody Acree reiterated a Buy with a $325 forecast. JP Morgan analyst Harlan Sur maintained a Neutral rating with a $270 price forecast.
Wedbush Sees One-Time China Boost
Bryson said AMD exceeded revenue expectations largely due to strength in its Data Center and Client segments, but noted that a meaningful portion of the upside came from MI308 sales to China. He cautioned that this suggests growth in AI-related silicon may be more subdued, given that the China contribution is unlikely to repeat.
Even so, Bryson expects AMD to benefit from ongoing supply tightness in server CPUs, which should support higher sales and margins over the coming quarters. He said the company remains well-positioned as a credible alternative to Nvidia Corp. (NASDAQ:NVDA) in the AI market and projected fiscal 2026 revenue of $44.3 billion with earnings of $6.26 per share.
KeyBanc Highlights MI450 and Helios Roadmap
Vinh said AMD delivered strong fourth-quarter results and issued optimistic first-quarter guidance, even though $390 million in MI308 sales to China provided a one-time boost. He pointed to continued progress on AMD's next-generation MI450 and Helios platforms, which are expected to begin ramping in the third quarter of 2026 with meaningful volumes in the fourth quarter. Vinh forecast fiscal 2026 revenue of $49.5 billion and earnings of $7.75 per share.
Rosenblatt Flags Capacity Expansion and Cost Pressures
Cassidy said AMD posted another strong quarter on rising data center demand, adding that the company continues to gain market share in that segment. Management is working closely with suppliers to expand capacity and confirmed that MI450 and Helios racks are on track for a production ramp in the second half of 2026, with multiple customers ready for deployment. However, higher operating expenses tied to these launches are pressuring near-term earnings. Cassidy projected fiscal 2026 revenue of $46.6 billion and EPS of $7.00.
Benchmark Sees AI Roadmap Gaining Traction
Acree also pointed to accelerating data center demand and growing customer adoption of AMD's high-performance computing products. While MI308 sales to China boosted near-term results, he said the longer-term outlook is driven by the ramp of MI450 and Helios in the second half of 2026. Despite a maturing console cycle weighing on gaming, Acree expects data center and client strength to support growth through 2026 and beyond. He forecast fiscal 2026 revenue of $46.3 billion and EPS of $6.74.
JP Morgan Cautions on Margins and Operating Leverage
Sur described AMD's quarter as mixed, noting that nearly $400 million of December-quarter revenue came from unexpected MI308 sales. While first-quarter guidance was better than expected, he raised concerns about operating leverage and potential gross-margin pressure as MI450 and Helios ramp later this year. Still, Sur said AMD continues to execute well across its product portfolio, gaining share in both Server and Client CPUs, helped in part by Intel Corp.'s (NASDAQ:INTC) supply constraints. He projected fiscal 2026 revenue of $46.4 billion and EPS of $6.80.
Cantor Fitzgerald Flags AI Expectations Risk
Muse said AMD beat revenue and earnings expectations for both the December quarter and the March-quarter outlook, but emphasized that roughly $390 million in fourth-quarter revenue and $100 million in first-quarter guidance came from unexpected MI308 sales to China. With high investor expectations for AI-driven server CPU demand, the report was viewed as moderately disappointing. Muse remains bullish on data center CPUs, expects Client revenue to slip slightly, and sees Embedded growth continuing. He projected fiscal 2026 revenue of $46.3 billion and EPS of $6.60.
AMD Price Action: Advanced Micro Devices shares were down 17.17% at $200.53 at the time of publication on Wednesday, according to Benzinga Pro data.
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