Advanced Micro Devices (AMD) has been seeing some good news, and more might on the way next month.
The chipmaker recently reached a partnership with Saudi Arabian AI startup Humain to help build a $10 billion AI-computing infrastructure over five years, a project that could boost AMD’s role in the AI-chip market.
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On May 14, AMD also unveiled a $6 billion addition to its stock buyback plans, bringing its total authorization to around $10 billion. The move suggests confidence from the board in AMD’s long-term strategy.
These developments come as a much-needed boost for AMD, whose stock had been under pressure for quite a while. In 2024, the shares lost about 18% as investors questioned whether AMD could catch up to Nvidia (NVDA) , the market leader in the AI-GPU race.
In April, AMD warned of higher costs tied to President Donald Trump’s latest controls on exports of high-end AI chips to China. The new policy also requires companies to obtain licenses to ship advanced chips. AMD said the restrictions could cost it as much as $800 million.
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In the first four months of 2025 AMD stock lost nearly 20%, dragged by a broader tariff-related pullback and concern about whether demand for high-priced AI graphics-processing units was sustainable. That worry arose after the rollout of DeepSeek, a cheaper Chinese alternative to U.S. artificial-intelligence models.
Still, with fresh partnerships, strong Q1 earnings and analysts updating views, AMD may be positioning itself for a turnaround ahead of its June AI event.
Over the past month, AMD stock has rallied nearly 31%. It remains off 7.2% year-to-date.
AMD Q1 earnings beat Wall Street estimates
AMD is Nvidia’s closest competitor in the AI GPU market, with $5 billion in AI GPU sales in fiscal 2024. These chips are used in large volumes across data centers to build generative AI systems.
On May 6 AMD reported fiscal-first-quarter earnings that topped expectations, and the Santa Clara, Calif., company provided a strong forecast for current-quarter revenue.
Adjusted earnings per share came in at 96 cents, above Wall Street’s expectations of 94 cents. Revenue reached $7.44 billion, beating the consensus forecast of $7.13 billion.
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The company’s data center segment reported $3.7 billion in sales, up 57% year over year and beating analysts’ estimates.
For the current quarter, AMD expects about $7.4 billion in revenue with a gross margin of 43%, compared with Wall Street estimates of 86 cents on $7.25 billion in sales.
That forecast includes $800 million in costs tied to U.S. restrictions on exporting some of its AI chips during the quarter.
AMD also said that due to export controls, it expected to lose $700 million of revenue this quarter and a total $1.5 billion through the end of its fiscal year.
“While we face some headwinds from the dynamic macro and regulatory environments … we believe they are more than offset by the powerful tailwinds from our leadership product portfolio,” Su said on an earnings call with analysts.
Over the past month, the stock has rallied nearly 31%. It remains down 7.2% year-to-date.
Bank of America bullish on AMD stock
Bank of America reiterated a buy rating on AMD shares and maintained a price target of $130, which indicates 14.5% upside from recent levels, according to a May 20 research note.
Earlier this month the firm raised the target on AMD to $130 from $120. The upgrade was made ahead of AMD’s AI Investor Day scheduled for June 12.
Bank of America said AMD could deliver as much as 20% upside to consensus earnings estimates for 2026 and 2027, with potential earnings above $8.50 a share. Meanwhile, the stock is trading at under 20 times earnings, which “seems too compelling.”
The firm also pointed to AMD’s strong position in computing and AI, and rising market share in central processing units.
“Even though we expect NVDA (80%+ share) and custom chips (10%-15% share) to dominate, we believe AMD can be a credible 3%-4% share … in AI accelerator,” the analysts wrote.
Bank of America expects AMD to highlight a lineup of AI partners and products, including accelerators, systems, software, CPUs and networking, at its June 12 event.
Still, the investment firm warned of risks ahead, including trade-related macroconomic uncertainty and strong competition in AI and custom chips.
AMD closed at $112.06 on May 21.
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