AMD stock rockets 7% on Friday: analysts see more upside ahead

Shares of Advanced Micro Devices AMD surged sharply on Friday, rebounding from losses in the previous session.

At the time of writing, the stock was up around 7% to trade at $436.

Investor sentiment improved following stronger-than-expected US jobs data and continued enthusiasm around the chipmaker’s artificial intelligence outlook.

AMD shares extended their recent rally after the company’s earnings-driven surge earlier this month.

The stock has climbed roughly 20% over the past five trading sessions and is up more than 85% over the last 30 days.

The broader market also moved higher on Friday. The S&P 500 gained about 0.6%, while the Nasdaq Composite rose 1.1%.

The Dow Jones Industrial Average added 55 points, or 0.1%.

Investor sentiment was supported by stronger-than-expected labour market data.

According to the Bureau of Labor Statistics, nonfarm payrolls increased by 115,000 in April, exceeding economists’ expectations of 55,000 growth tracked by Dow Jones.

The unemployment rate held steady at 4.3%, matching forecasts.

All three major indexes were on track to end the week higher as corporate earnings season continued to deliver largely positive results.

Analysts raise targets after earnings beat

Wall Street analysts have turned increasingly bullish on AMD following its latest quarterly results and expanding exposure to artificial intelligence workloads.

Aletheia Capital raised its price target on AMD stock to $500 while maintaining a Buy rating.

The firm cited growing momentum in AMD’s central processing unit business tied to agentic artificial intelligence applications.

The brokerage noted that AMD shares have doubled since a March 29 report highlighting the company’s positioning in AI-related CPU demand.

AMD Chief Executive Officer Lisa Su also confirmed the company has secured supply capacity through 2027, allowing Aletheia to remove a previous supply constraint adjustment from its forecasts.

The firm now projects AMD could generate between $90 billion and $100 billion in revenue by 2027, effectively accelerating expectations that were previously tied to 2028.

Separately, Wells Fargo analyst Aaron Rakers reiterated a Buy rating on AMD and raised his price target to $505 from $345.

Rakers cited the company’s strong first-quarter earnings performance, which included adjusted earnings per share of $1.37 and revenue of $10.25 billion, both ahead of Wall Street estimates.

AI demand driving CPU growth

Speaking to CNBC earlier this week, Lisa Su said demand for CPUs has accelerated significantly due to the emergence of agentic artificial intelligence applications.

“Agents are really driving tremendous demand in the overall AI adoption cycle, and we’re very excited to be in the middle of it,” Su said during an interview on CNBC’s “Squawk on the Street.”

AMD reported first-quarter revenue growth of 38% year-on-year, driven largely by strength in its data centre segment.

Su said the company had seen a meaningful shift in computing workloads over the last 90 days following discussions with major customers.

“The main thing that I can say is that we are seeing a shifting of the workload,” she said.

The shift has helped revive demand for CPUs, particularly for inference-related AI tasks.

While Nvidia continues to dominate the graphics processing unit market, AMD has maintained a strong position in CPUs, which are increasingly being used in AI inference workloads.

In November, AMD had forecast the server CPU market would grow around 18% annually over the next three to five years.

During the company’s earnings call this week, Su revised that outlook sharply higher, saying the market could now expand at more than 35% annually and exceed $120 billion by the end of the decade.