Shares of Advanced Micro Devices (AMD) rebounded sharply on Friday, erasing losses from the previous session.
At the time of writing, the stock was up around 7% to trade at $436.
Investor sentiment improved after better-than-expected U.S. jobs data and continued enthusiasm around the chipmaker’s artificial intelligence prospects.
AMD shares extended their recent rally following the company’s earnings-related jump earlier this month.
The stock has climbed about 20% over the last five trading sessions and has gained more than 85% over the last 30 days.
The broader market also appreciated on Friday. The S&P 500 gained about 0.6%, while the Nasdaq Composite gained 1.1%.
The Dow Jones Industrial Average added 55 points, or 0.1%.
Investor sentiment was supported by stronger-than-expected labor market data.
According to the Bureau of Labor Statistics, nonfarm payrolls grew by 115,000 in April, exceeding economists’ expectations of 55,000 growth tracked by Dow Jones.
The unemployment rate remained stable at 4.3%, in line with forecasts.
The three main indices were on track to end the week higher as the results season continues to deliver mostly positive results.
Analysts raise targets after expectations exceeded
Wall Street analysts have become increasingly bullish on AMD after its latest quarterly results and growing exposure to artificial intelligence workloads.
Aletheia Capital raised its price target on AMD stock to $500 while maintaining a buy recommendation.
The company cited growing momentum in AMD’s central processing unit (CPU) business related to agentive artificial intelligence applications.
The brokerage noted that AMD shares have doubled since a March 29 report highlighting the company’s positioning on AI-related CPU demand.
AMD Chief Executive Officer Lisa Su also confirmed that the company had secured supply capacity through 2027, allowing Aletheia to remove an earlier adjustment related to supply constraints from its forecast.
The firm now projects that AMD could generate between $90 billion and $100 billion in revenue by 2027, accelerating expectations previously linked to 2028.
Separately, Wells Fargo analyst Aaron Rakers reiterated a buy recommendation on AMD and raised his price target to $505 from $345 previously.
Rakers highlighted the strong performance of the company’s first quarter results, which included adjusted earnings per share of $1.37 and revenue of $10.25 billion, both above Wall Street estimates.
AI Demand Drives CPU Growth
Interviewed by CNBC earlier this week, Lisa Su said CPU demand has accelerated sharply due to the emergence of agentive artificial intelligence applications.
“Agents are really creating tremendous demand in the overall AI adoption cycle, and we’re very excited to be at the heart of that movement,” Su said in an interview on CNBC’s “Squawk on the Street.”
AMD reported first-quarter revenue growth of 38% year-over-year, primarily driven by strength in its data center segment.
Su said the company has seen a significant change in IT workloads over the past 90 days following discussions with major customers.
“The main thing I can say is we’re seeing a shift in workloads,” she said.
This shift helped revive CPU demand, particularly for AI-related inference tasks.
While Nvidia continues to dominate the graphics processing unit market, AMD has maintained a strong position in CPUs, which are increasingly used for AI inference workloads.
In November, AMD forecast that the server CPU market would grow about 18% annually over the next three to five years.
During the earnings conference call this week, Su sharply revised that outlook upward, saying the market could now grow more than 35% annually and surpass $120 billion by the end of the decade.
