This analyst loves Advanced Micro Devices

Roth Capital Markets analyst Suji Desilva reiterated a “Buy” rating and $300.00 12-month price target on Advanced Micro Devices (Advanced Micro Devices Stock Quote, Chart, News, Analysts, Financials NASDAQ:AMD), saying the company is well positioned for a strong AI-driven ramp in calendar 2026 following a solid fourth-quarter performance and constructive first-quarter outlook.

AMD reported Q4/25 revenue of $10.3-billion, up 11% sequentially and 34% year over year, beating consensus expectations and reflecting broad-based strength across its core segments. Data centre revenue rose 24% quarter over quarter and 39% year over year, driven by continued ramp in AI infrastructure programs and sustained EPYC server CPU growth and share gains. Client revenue increased 13% sequentially and 34% year over year on strong Ryzen CPU shipments and improving mix in premium commercial notebooks, while embedded revenue grew 11% sequentially despite modest year-over-year pressure. Gaming revenue declined sequentially as expected due to console semi-custom adjustments, but remained sharply higher year over year.

Adjusted gross margin improved to 55%, up roughly 100 basis points sequentially even after excluding the benefit from the sale of previously written-down China-specific GPU product. Non-GAAP EPS of $1.53 rose sharply from the prior quarter, reflecting operating margin expansion and scale benefits.

For Q1/26, AMD guided revenue of $9.8-billion plus or minus $300-million, above consensus despite typical seasonal softness and lower sequential China-specific MI308 sales. Desilva acknowledged higher near-term operating expenses but said he expects revenue momentum to absorb the increased cost base and drive operating leverage into the back half of calendar 2026. Following a revision to management’s operating expense outlook, Desilva reduced his Q1 expense assumptions, lifting his CY26 and CY27 EPS estimates.

“We believe AMD is continuing to ramp programs into the AI infrastructure market across large hyperscale deployments with Instinct GPU sales and continued EPYC CPU growth and share gains,” Desilva said.

Desilva said visibility into calendar 2026 demand remains strong, supported by a healthy backlog and proactive supply-chain management. He expects growth to accelerate as AMD begins shipping its next-generation Helios rack-scale AI systems starting mid-2026, expanding beyond its initial lead AI infrastructure customer and creating incremental upside to AI-related revenue.

“We expect a boost to revenue from ramping sales of AMD’s newer Instinct-based platforms with the launch of rack-scale Helios systems,” he said, adding that broader customer adoption could further lift AI infrastructure results in coming quarters.

-30-