AMD Stock Forecast & Price Target

Advanced Micro Devices (AMD) reported strong financial performance for the year, with Gaming revenue reaching $3.9 billion, a notable year-over-year increase of 51%, and Client & Gaming revenue totaling a record $14.6 billion, also up 51% year-over-year. The company's Data Center revenue grew 32% year-over-year to $16.6 billion, driven by demand for EPYC CPUs and AMD Instinct GPUs, while the non-GAAP gross margin expanded to 57%, reflecting an improved product mix and effective inventory management. Furthermore, projected earnings per share (EPS) for fiscal year 2027 are anticipated to increase from $7.46 to approximately $13.63, indicating substantial potential for EPS accretion and a solid foundation for future growth.

The analysis indicates a negative outlook for Advanced Micro Devices due to a forecasted significant decline in semi-custom revenue, projected to experience a double-digit decrease in 2026 as the current console cycle matures. Moreover, the gaming sector faced a notable sequential decline of 35% in revenue, despite a year-over-year growth of 50%, raising concerns about sustained performance in the segment. Lastly, the expectation of a slowdown in the gaming and console markets, compounded by elevated operating expenses leading to revised earnings estimates for FY26 and FY27, suggests increased risk to the stock given its current valuation compared to peers.