AMD's Rally Faces a Reality Check as Earnings Day Approaches

AMD shares hit all-time highs ahead of May 5 Q1 earnings, with strong data center demand and OpenAI partnership offsetting China export risks and valuation concerns.

AMD shares have been on a tear, surging nearly 70% in the past 30 days alone and hitting a fresh all-time high of €297.80. The stock closed Thursday at €301.15, extending its year-to-date gain to roughly 58% and more than tripling over the past twelve months. Trading volume recently ran about 13% above the three-month average, signaling that institutional investors are jockeying for position ahead of the company’s first-quarter earnings release on May 5.

What the Numbers Say

Wall Street expects AMD to report earnings per share of $1.30 for Q1, representing a 35.4% year-over-year increase. Revenue is forecast to reach nearly $9.84 billion, up about 32% from the same period last year. Notably, the consensus EPS estimate has been revised upward by 1.8% over the past 30 days, reflecting growing optimism.

The bullish case got an unexpected boost from rival Intel, whose strong Q1 results showed robust growth in data center and AI CPU revenue. That suggests a broader recovery in x86 processor demand, which bodes well for AMD’s EPYC server chip business. DA Davidson raised its 2026 revenue forecast for AMD by $2 billion and its gross profit estimate by $1.5 billion, both well above the market consensus.

The Bear Case Gains Traction

But the blistering rally has created a sharp divide among analysts. Northland Capital Markets downgraded AMD to “Market Perform” with a $260 price target, citing stretched valuations and intense competition from Nvidia. The stock’s more than threefold increase over the past year has made skeptics increasingly vocal.

Stifel counters with a $320 price target and a Buy rating, pointing to the high visibility provided by long-term megadeals. Nearly 95% of AMD’s shares are held by institutional investors, providing a sturdy support floor.

Headwinds on the Horizon

Not everything is rosy. U.S. export restrictions on Instinct GPUs to China are weighing on the business: AMD expects only about $100 million in revenue from MI308 sales in China for Q1. Adding to the uncertainty, reports suggest OpenAI has missed internal revenue and user targets for 2026, leading some analysts to forecast a decline in AI infrastructure spending by 2027 — a potential headwind for AMD’s growth narrative.

Two Catalysts Beyond Earnings

The May 5 earnings call will be closely watched for updates on AMD’s partnership with OpenAI. In October 2025, AMD announced it would supply OpenAI with GPUs totaling six gigawatts of capacity. OpenAI plans to build a one-gigawatt data center this year based on AMD’s MI450 chips. Concrete timelines for ramping those chips would be a powerful signal for bulls.

Looking further ahead, AMD has scheduled its “Advancing AI 2026” event for July 23 at the Moscone Center in San Francisco. Industry sources expect the company to unveil the next-generation Instinct MI450 accelerators and EPYC Venice processors based on the Zen 6 architecture, likely built on TSMC’s 2-nanometer process with up to 192 cores. Product announcements with firm partner commitments could provide another catalyst — provided the May 5 numbers don’t disappoint.

The Balancing Act

Management faces a delicate challenge: the AI race demands massive R&D spending, while the market expects expanding profit margins. Tuesday’s conference call will offer concrete answers on how AMD plans to strike that balance in the current year. For now, the stock sits at a crossroads, with a 64% April surge on one side and a deepening Wall Street schism on the other.