Samsung's 2nm Bet Adds a New Layer to AMD's AI Story as Shares Cool Off

AMD partners with Samsung for 2nm manufacturing to reduce TSMC reliance; stock dips 5% on rate fears, but analysts bullish on Agentic AI and data center growth.

Advanced Micro Devices is deepening its production links with Samsung Foundry, preparing to finalize an agreement for two-nanometer chip manufacturing. The move diversifies the company's supply chain away from its heavy reliance on Taiwan's TSMC and comes just as the stock pulls back from a blistering rally that had nearly doubled its value since the start of the year. The semiconductor heavyweight shed nearly five percent on Friday to close at EUR 365.55, retreating from a fresh 52-week high of around EUR 390.

Rate Fears and Trade Worries Trigger Profit-Taking

The correction was triggered by a combination of macroeconomic headwinds that hit the entire chip sector. Strong US jobs data reignited expectations that the Federal Reserve will keep interest rates higher for longer, a scenario that tends to compress valuations in high-growth stocks. At the same time, fresh speculation about US trade restrictions targeting China – particularly on AI and high-performance computing – added a layer of geopolitical uncertainty. With the stock trading at a price-to-earnings ratio of roughly 139, the sell-off was amplified by technical signals that had already flashed overbought readings mid-week.

Agentic AI Sparks New Round of Analyst Upgrades

Despite the short-term market jitters, several top-tier Wall Street firms have doubled down on AMD's long-term thesis. Goldman Sachs raised its rating to Buy with a price target of $450, while Bank of America went a step further, lifting its target to $500. The catalyst is the growing shift toward so-called "Agentic AI" – autonomous systems that can tackle multi-step tasks like programming and workflow management without human intervention. CEO Lisa Su has raised her outlook for the server CPU market, now projecting annual growth of more than 35 percent and a total addressable market of $120 billion by 2030. Bank of America estimates the broader AI data-center universe could swell to $1.7 trillion by the end of the decade.

Data Center Revenue Surges as New Silicon Readies for Launch

The immediate operational picture remains strong. First-quarter revenue in the data center segment climbed 57 percent to $5.8 billion, laying a solid foundation for the company's ambitions. For the second quarter, management has guided for revenue of roughly $11.2 billion, representing year-on-year growth of nearly 50 percent. In the second half of the year, AMD plans to roll out its next-generation Instinct MI400 series of AI accelerators, followed by the MI450 line, which will be detailed at the "Advancing AI" investor event in July. Meanwhile, the company is also building out its networking ecosystem: together with OpenAI and Microsoft, it published the specification for a new Ethernet-based protocol called Multipath Reliable Connection, designed to boost performance and reliability in large AI training clusters.

Chart Support and Seasonal Catalysts

Following the pullback, the stock's technicals are starting to reset. The relative strength index has cooled to a neutral reading of around 52, suggesting the short-term overbought condition has eased. Should the decline extend, the 50-day moving average near EUR 236 offers a major floor of support. With the annual general meeting concluded, investor attention is now trained on execution – particularly the mass shipments of the next GPU generation in the third quarter. The Samsung deal, if finalized, would further bolster confidence that AMD can secure the capacity needed to meet surging demand for its AI chips.