Elizabeth H. Volk

Wed, Jun 25, 2025, 4:59 AM2 min read

Advanced Micro Devices (AMD) is a semiconductor giant in its own right, though the company has been left in the dust by rival Nvidia’s (NVDA) explosive rise in the artificial intelligence (AI) era. However, AMD has shown some remarkable strength lately, with the chip stock up 9.5% in the past 5 days following multiple positive catalysts and analyst upgrades.

Melius Research on Monday upgraded AMD to "Buy" with a $175 price target, with the firm projecting a “sustainable surge in inferencing.” And on Tuesday, CFRA Research raised the semiconductor stock to "Strong Buy" with a $165 price target, as analyst Angelo Zino wrote to clients that “we see AMD closing the competitive gap to NVIDIA (NVDA) in 2026 as it launches the MI400x.”

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AMD’s Q1 performance exceeded expectations, reporting revenue of $7.44 billion, representing a 35.9% year-over-year growth. The data center segment has emerged as a particular bright spot, with a 57% year-over-year increase in revenue to $3.7 billion - despite facing headwinds from export restrictions to China.

The company’s expanding customer base now includes major players like OpenAI, Microsoft (MSFT), and Oracle (ORCL), significantly strengthening its position in the AI ecosystem. A strategic partnership with HCLTech to develop AI and cloud solutions, coupled with a $10 billion infrastructure investment partnership with Saudi Arabia's Humain, demonstrates AMD’s commitment to expanding its global enterprise presence.

The upcoming MI400 series and Helios rack-scale system are generating significant optimism among analysts, who predict the company's earnings per share could exceed $8 within two years. While AMD currently trails Nvidia in the AI chip market, recent product improvements and partnerships are helping to close this competitive gap.

More broadly, the semiconductor industry outlook remains positive, with projections indicating an expansion from $452 billion in 2021 to $803 billion by 2028. CEO Lisa Su's vision of the AI accelerator market exceeding $500 billion by 2028 appears increasingly achievable, given the company's current trajectory and strategic positioning.