AMD Stock Is Up 238% in the Past Year: What Could Drive the Next Move

Main conclusions:

• AMD is benefiting from strong demand for AI accelerators and data centers, and 2025 revenue grew 34% while free cash flow increased to approximately $6.7 billion.
• AMD stock could reasonably reach $438 per share by December 2028, based on our valuation assumptions.
• This implies a total return of 43.4% from the current price of $305, with an annualized return of 14.3% over the next 2.7 years.

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What happened?

Advanced Micro Devices (AMD) has become one of the biggest stories in the market when it comes to artificial intelligence chips. AMD is up about 238% over the past year as investors focus on AMD’s role in GPUs, server CPUs and AI infrastructure. AMD reported record fourth-quarter revenue of $10.3 billion and $34.6 billion for all of 2025.

The biggest recent catalyst has been AMD’s expanded partnership with Meta. AMD said Meta will deploy 6 gigawatts of AMD GPUs, starting with the MI450 platform in the second half of 2026. This deal is important because it gives AMD a large hyperscale customer as it attempts to compete more directly with AI accelerators.

AMD also announced a strategic partnership with Nutanix to support open enterprise AI platforms, adding another AI adoption channel beyond hyperscale cloud customers. The company’s next earnings call on May 5, 2026 will be important as investors monitor whether demand for AI translates into revenue visibility. The importance of AI spending in the semiconductor supply chain also supported sentiment towards chip stocks.

Here’s why AMD stock could continue to move based on AI GPU demand, MI450 execution, and margin improvement that will shape the next phase of the story.

What the model says for AMD stock

We analyzed AMD stock’s upside potential based on AI accelerator ramp-up, data center momentum, and improving earnings power.

Based on estimates of 34.0% annual revenue growth, 22.4% operating margins, and a normalized P/E multiple of 35.2x, the model predicts that AMD stock could rise from $305 to $438 per share.

This would represent a total return of 43.4%, or an annualized return of 14.3% over the next 2.7 years.

Our valuation hypotheses

TIKR’s valuation model allows you to input your own assumptions about a company’s revenue growth, operating margins and P/E multiple, and calculate the stock’s expected returns.

Here are the assumptions we used for AMD stock:

1. Revenue growth: 34%

AMD’s growth story is driven by AI accelerators, server processors and stronger data center demand. Revenue increased by 34.3% in 2025 to reach $34.6 billion. This marks a major acceleration from growth of 13.7% in 2024.

The market considers AMD as a serious provider of AI infrastructure. The Meta deal adds scale to this story, as it ties AMD’s MI450 platform to a major long-term deployment. Investors are watching to see if this translates into sustained data center revenue growth.

Based on analyst consensus estimates, we use a revenue growth forecast of 34.0%. This reflects strong AI-related demand, but it still depends on AMD’s execution of product ramps and effective competition from Nvidia.

2. Operating margins: 22.4

AMD’s operating margin improved from 8.1% in 2024 to 10.8% in 2025. Gross margin remained strong at 52.5%, showing that the company can generate attractive profitability even while investing heavily in research and development. R&D spending reached $8.1 billion, a testament to how aggressively AMD is funding its future chip platforms.

The margin story depends on the mix. AI GPUs and server CPUs can support higher profitability, but product ramps, customer pricing and supply chain costs can still weigh on results. Investors need evidence that AI revenue growth improves operating leverage.

Based on analyst consensus estimates, we use an operating margin forecast of 22.4%. This requires AMD to roll out higher value products for AI and data centers while maintaining spending discipline.

3. Multiple exit P/E: 35.2x

AMD’s valuation reflects high expectations for AI growth. The model uses a P/E multiple of 35.2x, which is close to the historical one-year multiple and lower than the exceptionally high 10-year historical figure. The valuation thus remains linked to the strength of recent profits rather than to older cycle extremes.

The stock is already trading at a high price because investors expect faster AI-related growth. At the same time, AMD must prove that its AI roadmap can translate into sustainable profits. This makes the multiple runtime sensitive.

Based on analyst consensus estimates, we use an exit P/E multiple of 35.2x. This reflects AMD’s stronger growth profile while recognizing that semiconductor valuations can compress quickly if expectations cool.

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What happens if things get better or worse?

Different scenarios for AMD stock through 2035 show varied results depending on AI infrastructure demand, margin execution and valuation discipline:

• Feasible scenario: Adoption of AI GPUs is increasing, but valuation compression limits returns to 19.8% annual returns.
• Average case: AMD scales AI accelerators and data center CPUs as expected – 20.6% annual returns.
• Cas éleve : Demand for AI remains exceptionally strong and margins are increasing further – 32.2% annual returns.

Even in the conservative case, Vertiv stock offers positive returns supported by its strong position in power and cooling infrastructure, increased free cash flow and deep exposure to AI data center spending.

AMD’s next move will likely depend on whether the MI450 ramp-up can support the growth already anticipated by investors. The stock has already moved strongly, so revenue visibility and margin quality are more important from now on. If AMD converts AI partnerships into sustained earnings growth, the valuation setup could remain compelling.

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Should you invest in Advanced Micro Devices?

The only way to find out is to look at the numbers for yourself. TIKR gives you free access to the sameinstitutional quality financial datathat professional analysts use to answer exactly this question.

Select AMD and you’ll see years of historical financial data, Wall Street analysts’ revenue and profit forecasts for upcoming quarters, how valuation multiples have changed over time, and whether price targets are trending up or down.

You can create a free watchlist to track AMD as well as all the other actions that interest you. No credit card is required. Just the data you need to decide for yourself.

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Disclaimer:

Please note that TIKR articles are not intended as financial or investment advice from TIKR or our content team, nor do they constitute recommendations to buy or sell any stock. We create our content based on TIKR Terminal investment data and analyst estimates. Our analysis may not include recent company news or important updates. TIKR has no position in the stocks mentioned. We thank you for reading and wish you happy investments!