AMD’s AMD inventory has had an explosive begin to 2026, spiking over +15%, and is now up greater than +100% within the final yr because it features share within the AI chip market.
With corporations searching for alternate options to Nvidia’s NVDA ecosystem, AMD’s rally has been pushed by surging demand for its AI accelerators, bullish analyst upgrades, and near-sold-out server CPU capability — creating an ideal storm of optimism round its income outlook.
This makes it a worthy subject of whether or not it is nonetheless time to purchase, maintain, or take earnings in AMD inventory as its This autumn outcomes method after-market hours on Tuesday, February 3.
Picture Supply: Zacks Funding Analysis
AMD’s This autumn Expectations
Based mostly on Zacks estimates, AMD’s This autumn gross sales are thought to have elevated 26% to $9.67 billion in comparison with $7.66 billion a yr in the past. On the underside line, This autumn EPS is predicted at $1.32, a 21% enhance from $1.09 per share within the comparative quarter.
It is noteworthy that AMD has been in a position to exceed prime and backside line expectations in every of its final 4 quarterly studies, posting a median gross sales and EPS shock of 4.02% and a pair of.45%, respectively.
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Moreover, the Zacks ESP (Anticipated Shock Prediction) suggests AMD may as soon as once more surpass earnings expectations, with the Most Correct and up to date estimate amongst Wall Avenue analysts having This autumn EPS pegged at $1.34 and a pair of% above the underlying Zacks Consensus (Present Qtr under).
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Excessive Demand for AMD’s AI Accelerators
Rounding out fiscal 2025, AMD’s whole gross sales are anticipated at $34.03 billion, a 32% spike from $25.79 billion in 2024. Plus, FY26 gross sales are projected to soar one other 29% to $43.9 billion. It’s price noting that analysts are already forecasting AMD’s AI income for 2026 to be between $14-$15 billion, pushed by its MI355 and MI455 accelerator shipments.
The MI355 and MI455 accelerators are next-generation AI and HPC (high-performance computing) GPUs constructed on AMD’s compute DNA structure (CDNA). These AI accelerators are designed to compete immediately with Nvidia’s highest-end data-center chips by providing huge reminiscence bandwidth, superior low-precision codecs, and excessive compute density.
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Optimistic EPS Revisions
AMD’s annual earnings at the moment are anticipated to be up 20% for FY25 at $3.97 per share, versus EPS of $3.31 in 2024. Even higher, FY26 EPS is forecasted to soar one other 60% to $6.36.
Extra reassuring is that FY25 EPS revisions are barely increased within the final 30 days, with FY26 EPS estimates rising greater than 1% from projections of $6.27 a month in the past.
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Conclusion & Ultimate Ideas
AMD’s sizzling begin in 2026 isn’t hype; it’s the results of actual demand for its AI {hardware}, robust analyst conviction, and a product roadmap that aligns completely with the AI infrastructure growth. At round $250 a share, AMD inventory is at the moment buying and selling at 37X ahead earnings, which is a noticeable premium to the benchmark S&P 500 however presents a slight low cost to Nvidia’s 40X.
Contemplating EPS revisions have been constructive, and AMD has strengthened its place within the semiconductor market because of its AI accelerators, the rally in its inventory may nonetheless have legs. For now, AMD inventory sports activities a Zacks Rank #2 (Purchase).
#1 Semiconductor Inventory to Purchase (Not NVDA)
The unimaginable demand for knowledge is fueling the market’s subsequent digital gold rush. As knowledge facilities proceed to be constructed and consistently upgraded, the businesses that present the {hardware} for these behemoths will grow to be the NVIDIAs of tomorrow.
One under-the-radar chipmaker is uniquely positioned to reap the benefits of the following development stage of this market. It makes a speciality of semiconductor merchandise that titans like NVIDIA do not construct. It is simply starting to enter the highlight, which is strictly the place you wish to be.
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This text initially printed on Zacks Funding Analysis (zacks.com).
The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.
