AMD’s stock has seen a significant surge, up over +15% in 2026 and +100% in the last year, driven by growth in the AI chip market. Analysts are optimistic about its revenue outlook ahead of Q4 results. Expectations for Q4 include a 26% increase in sales to $9.67 billion and EPS of $1.32.

AMD’s AI accelerators are in high demand, with total sales for fiscal 2025 expected to reach $34.03 billion and projected to soar to $43.9 billion in FY26. Analysts forecast AI revenue for 2026 to be between $14-$15 billion, driven by the MI355 and MI455 accelerator shipments, designed to compete with Nvidia’s data-center chips.

Positive EPS revisions indicate a 20% increase in annual earnings for FY25 at $3.97 per share and a projected 60% increase to $6.36 for FY26. With a Zacks Rank of #2 (Buy), AMD’s stock is trading at 37X forward earnings and offers potential for further growth in the semiconductor market.

The demand for data is driving the semiconductor market’s growth, with opportunities for under-the-radar chipmakers to capitalize on the expanding market. One such company is poised to benefit from the next phase of growth in data centers, offering unique semiconductor products that set it apart from competitors like Nvidia.

This article was originally published on Zacks Investment Research.

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