After a Q1 Blowout and a Soaring Share Price, Is AMD Stock Still a Buy?

Shares of chipmaker Advanced Micro Devices (NASDAQ: AMD) person been connected a teardrop successful 2026. As of this writing, the banal has much than doubled twelvemonth to day and astir quadrupled implicit the past 12 months.

The latest limb of the rally followed AMD's first-quarter net study successful aboriginal May, erstwhile gross maturation accelerated and escaped currency travel much than tripled twelvemonth implicit year. Additionally, management's guidance for the existent play was impressive.

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With shares present adjacent grounds highs, the question is whether caller wealth should inactive spell to enactment here. After all, the concern is firing connected each cylinders, with surging request for artificial quality (AI) infrastructure pushing the company's information halfway concern to caller highs. But the stock's valuation arguably reflects this -- and past some.

So, is AMD banal inactive a buy?

A wide acceleration successful the AI communicative

AMD's first-quarter gross roseate 38% twelvemonth implicit twelvemonth to $10.3 billion, easy clearing the company's ain forecast of astir $9.8 cardinal astatine the midpoint. This was an acceleration from 34% maturation successful the 4th fourth and 36% successful the year-ago period. And it gets better. The chipmaker guided for second-quarter gross of astir $11.2 billion, implying maturation of astir 46% twelvemonth implicit year. That would people a further step-up successful pace.

The information halfway segment, which sells AMD's EPYC server chips and Instinct AI accelerators, is the wide motor for AMD these days. This segment's gross jumped 57% twelvemonth implicit twelvemonth to $5.8 cardinal -- up from 39% maturation successful the anterior quarter. And present the cardinal conception accounts for much than fractional of full revenue.

Importantly, profitability and currency procreation person followed. AMD's Non-GAAP (adjusted) net per stock roseate 43% to $1.37. And escaped currency travel much than tripled to a grounds $2.6 billion, lifting the escaped currency travel borderline to 25% from conscionable 10% a twelvemonth earlier.

Further, the company's caller lawsuit wins person been needle movers. In February, AMD and Meta Platforms unveiled a multi-year statement covering up to 6 gigawatts of Instinct GPUs, with the archetypal 1-gigawatt deployment to usage customized MI450 silicon. This came connected apical of a akin 6-gigawatt woody with OpenAI announced past October.

"As we attack production, request for MI450 bid GPUs continues to strengthen, with pb lawsuit forecasts present exceeding our archetypal plans, and a increasing fig of caller customers engaging connected large-scale deployments," AMD CEO Lisa Su said connected the company's first-quarter net call. Based connected this expanded visibility, Su added, AMD present has "strong and expanding confidence" it tin present tens of billions of dollars of information halfway AI gross successful 2027.