Why Advanced Micro Devices Stock Popped Today

• KeyBanc expert John Vinh upgraded AMD banal to overweight today.

• Vinh sees AI chips making up one-third of AMD's gross successful 2026.

• 10 stocks we similar amended than Advanced Micro Devices ›

Advanced Micro Devices (NASDAQ: AMD) banal jumped 5.7% done 10:10 a.m. ET Tuesday aft KeyBanc expert John Vinh upgraded AMD to "overweight" and assigned the semiconductor banal a $270 terms target.

AMD costs astir $220 aft today's terms surge -- implying there's inactive different 23% imaginable nett remaining.

KeyBanc had downgraded AMD banal to assemblage value (i.e., hold) successful April, citing concerns "there would beryllium an aerial pouch successful request betwixt MI355 and the motorboat of its rack-scale Helios level with MI455, which isn't expected to ramp into measurement until precocious 2026."

(MI355 is simply a high-performance GPU accelerator for artificial quality functions. MI455 is the adjacent procreation AMD AI chip.)

Citing "supply concatenation checks," Vinh present believes "the caller surge successful hyperscaler request has led to AMD to astir being wholly sold retired of server CPU successful 2026 and is perchance considering a terms summation of 10-15% successful 1Q26. We estimation server CPU for AMD volition turn astatine slightest 50% this year."

So request for AMD chips is doing conscionable fine, convey you precise much.

AMD could merchantability 200,000 of its MI355 chips successful H1 2026, and ramp MI455 accumulation successful H2, according to Vinh. He's forecasting $14 cardinal oregon adjacent $15 cardinal successful AI gross for AMD this year. That's astir triple the company's AI gross successful 2024.

With statement estimates calling for $45 cardinal successful total company revenue, AI could soon beryllium astir one-third of AMD's business, and increasing similar a proverbial weed. Most analysts hold AMD volition astir apt turn net astatine astir 44% annually implicit the adjacent 5 years.

With a P/E ratio northbound of 100, it had better. Otherwise, AMD banal won't beryllium a bargain astatine all, but a sell.

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