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Quick Look
- AMD’s post-earnings dip reflects “whisper number” disappointment, not weak fundamentals, as results and guidance still topped consensus.
- The next major catalyst is Helios rack-scale and MI450 execution later this year, which could unlock the growth the market is waiting for.
- Analyst sentiment stayed constructive, and the stock appears to be consolidating above key support with meaningful upside if data center momentum re-accelerates.
Advanced Micro Devices' (NASDAQ: AMD) share price dipped more than 5% following its Q4 2025 earnings report, opening a screaming buying opportunity because it missed the analysts' highest mark. Although results were better than the consensus, whisper numbers were pricing in gains that won’t come until later this year, highlighting another issue with the report. While MI450 and Helios' rack-scale solutions were mentioned, the details were understated relative to robust market expectations and left retail traders wanting more.
Smart money traders, as represented by the analysts, responded differently. The first revisions tracked by MarketBeat include numerous reaffirmed ratings and price targets, as well as a few price target increases focused on the future. The future includes the launch of Helios' rack-scale solutions in the back half of the current fiscal year, which will drive significant growth acceleration.
CEO Lisa Su says the data center business could grow to tens of billions annually (a conservative figure based on demand trends and NVIDIA (NASDAQ: NVDA) results), setting the stage for triple-digit revenue growth despite the company's forecasts of only high-double-digit growth.
The catalyst for higher AMD share prices that the market has been waiting for is still ahead, and its potential to move the market increases day by day. Most analysts' targets place AMD stock between $280 and $300, indicating a 40% to 50% upside from the key support level and potentially reaching a new all-time high. A move to new highs would be a bullish indicator, suggesting a move to the high-end of the target range near $380 for a nearly 100% gain is likely.
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Advanced Micro Devices' Blowout Quarter and Guidance Drive Value
Advanced Micro Devices had a blowout quarter, with revenue growing by nearly 34% to $10.3 billion, beating expectations by more than 650 basis points. The strength was underpinned by the Datacenter segment, which grew by 39%, but all segments reported growth. The weakest link is Embedded, which grew at a low single-digit rate, but it is expected to improve as the year progresses. The Client & Gaming segment also grew at a high 30% pace. Within the Datacenter business, strength was reported in GPU and CPU sales.
Margin news is more impressive. The company’s revenue leverage and operational quality drove significant margin strength, leaving operating income, net income, and free cash flow at record levels, along with revenue. Critical details include $1.53 in adjusted earnings, up 40% year-over-year (YOY) and more than 1500 bps better than forecast, and free cash flow of $2.1 billion.
The Q1 2026 guidance aligns with the Q4 results, being well-above forecasts yet not quite giving the market what it wanted. That said, the company anticipates a seasonally expected slowdown to only 32% YOY growth, 420 bps above forecasts, with earnings tracking along with it. Regarding Helios and MI450, the launch is still expected in the second half of the year, and the production ramp is expected by Q3. Early deliveries will focus on rack-scale business, including OpenAI and Oracle (NYSE: ORCL).
Advanced Micro Devices Consolidates for Next Move
Advanced Micro Devices' price action has been volatile since Q3 2025. However, the chart action reveals a market consolidating above critical resistance, now support, setting up for the next big move. This will probably begin later in the year as news about MI450 speeds up; the only uncertainty is how severe a price drop might occur in the first half. Based on the analyst and institutional trends, a move below critical support near $200 is not expected.
Further Reading
- 2 REITs That Look Attractive in a Stable Rate Environment
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