Data Center revenue rose 14% YoY, as strong EPYC processor demand offset headwinds from M1308 shipments to China.
Advanced Micro Devices (AMD) stock traded markedly lower in the overnight session following the Santa Clara, California-based chipmaker’s quarterly results. The adverse stock reaction did not deter retail users of the Stocktwits platform from getting even more bullish.
Following the quarterly print, retail sentiment toward AMD stock remained ‘extremely bullish’ (92/100), with the degree of optimism improving from a day ago. The earnings report set off “extremely high’ retail chatter.
Baird analyst Tristan Gerra raised the price target for AMD stock to $175 from $140 as he reviewed AMD’s results in a note released late Tuesday. The analyst maintains an ‘Outperform’ rating for the stock.
Gerra modeled 40% year-over-year artificial intelligence (AI) revenue growth for 2026. The outlook aligns with CoWoS allocation to AMD, as per Baird’s channel discussions, which is partly driven by higher pricing, the analyst noted.
CoWoS, which stands for Chip-on-Wafer-on-Substrate, is an advanced packaging technology developed by TSMC (TSM).
As such, the analyst sees a reacceleration of AI revenues in the second half.
Gerra noted that the third-quarter guidance does not include the contribution from AMD’s China-compliant Mi308 AI chip. Given the chip contributed 20% to the company’s topline before the write down on account of the U.S.’ China chip ban, it could add meaningful upside to AMD’s fourth-quarter revenue, he said.
Baird also expects AMD to post more share gains in the second half, with the client mix’s YoY improvement ongoing at the company. The macro uncertainties could keep second-half client revenue below seasonal levels, it added.
AMD’s earnings report for the second quarter of the fiscal year showed adjusted earnings per share (EPS) of $0.48, which was a penny less than the $0.49 per share estimate compiled by LSEG, according to CNBC.
The company recorded inventory and related charges of about $800 million during the quarter due to the China chip curbs.
Revenue rose 32% YoY to $7.69 billion, with the sequential increase at 3%. The topline beat the consensus estimate of $7.42 billion. Data Center revenue rose 14% YoY, as strong EPYC processor demand offset headwinds from M1308 shipments to China.
CEO Lisa Su said, “We are seeing robust demand across our computing and AI product portfolio and are well positioned to deliver significant growth in the second half of the year, driven by the ramp of our AMD Instinct MI350 series accelerators and ongoing EPYC and Ryzen processor share gains.”
The company guided to third-quarter revenue of approximately $8.7 billion, plus or minus $300 million, compared to the $8.32 billion consensus estimate.
A bullish watcher said AMD stock could turn green if the market rebounds on Wednesday.
Another user was bracing for a 5%-10% gain on Wednesday.
AMD stock has gained over 44% year-to-date, outperforming Nvidia’s 33% advance. The stock has traded within a 52-week range of $76.48 to $182.50.
The koyfin-compiled average analysts’ price target for the stock ($155.96) implies about 11% downside from the closing price on Tuesday.
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