In 2025, AMD had a strong year with its stock surging 77.3%, though its market cap of $411 billion is still much lower than Nvidia’s $4.65 trillion. AMD designs and markets computer chips, including CPUs, and AI accelerators like Ryzen and Instinct GPU lines for data centers.
The growing demand for AI products led to increased interest in AMD’s stock in 2025. Looking ahead to 2026, investors are curious if AMD can maintain its AI performance. Historically known for cheaper alternatives to Intel CPUs, AMD’s stock price has risen about 121% over the last year.
Share prices for AMD have risen rapidly, leading to concerns about valuation. Trading at 132 times trailing-12-month earnings and 102 times forward earnings, AMD must maintain growth to justify its high P/E multiples. To be a top AI stock, AMD simply needs to continue its recent success.
In its latest financial results, AMD reported a 36% year-over-year revenue growth, reaching $9.2 billion. Earnings per share of $1.20 exceeded estimates, reflecting strong performance in AI chips for data centers and consumers. The company’s fourth-quarter guidance projects $9.6 billion in revenue.
With the AI chips market expected to grow at a 15.7% CAGR and reach $565 billion by 2032, AMD has room for continued growth. Analysts rate AMD stock a moderate buy with a 4.4 score out of 5 and a high target price of $380, suggesting 50% upside potential in the next 12 months.
As an underdog in the AI sector, AMD has grown rapidly in recent years. If it can establish a strong presence in the AI chips market, it has the potential to be the top-performing AI stock in 2026. Analysts have identified 10 stocks with potential for high returns, though AMD wasn’t on the list.
Consider Stock Advisor’s total average return of 942%, compared to 196% for the S&P 500. The latest top 10 list offers investment opportunities for significant growth potential. Stock Advisor’s returns as of January 31, 2026, paint a promising picture for investors.
Read more at Yahoo Finance: Could This AI Stock Be the Top Performer of the New Year?