AMD’s Stock Surge Fueled by Rival’s Struggles

Advanced Micro Devices, Inc. (AMD) is currently riding one of its most impressive winning streaks in recent memory. The semiconductor company's shares have posted gains for nine consecutive trading sessions, resulting in a cumulative increase of 28 percent. This rally has propelled the firm's market capitalization upward by approximately $84 billion, reaching a total valuation of $422 billion. While optimistic analyst commentary has contributed, the primary catalyst appears to be the pronounced weakness of its historic competitor, Intel.

The contrast between the two chipmakers came into sharp focus following Intel's recent earnings release. Although Intel surpassed expectations for its fourth quarter, reporting revenue of $13.7 billion and adjusted earnings per share (EPS) of $0.15, its guidance for the first quarter of 2026 sent shockwaves through the market. The company projected revenue between $11.7 billion and $12.7 billion, with a midpoint of $12.2 billion falling below the consensus estimate of $12.5 billion. More startling was the forecast for adjusted EPS of $0.00, missing analyst projections of $0.05 to $0.08. On a GAAP basis, Intel expects a loss per share of $0.21. Chief Financial Officer David Zinsner added that supply constraints are likely to bottom out in Q1.

The market's reaction was severe, with Intel's stock plummeting 17 percent in a single day—its most significant daily loss in eighteen months. In a direct contrast, AMD shares advanced another 2.35 percent on the same Friday, capitalizing on the news.

Analyst Upgrade Sets the Stage

The current rally gained momentum in mid-January following a significant upgrade by KeyBanc Capital Markets analyst John Vinh. He raised his rating on AMD from "Sector Weight" to "Overweight," establishing a price target of $270. Vinh's rationale centered on overwhelming demand for server processors, suggesting AMD is effectively sold out for 2026. He further indicated that these supply constraints could allow AMD to raise prices by 10 to 15 percent in Q1 2026.

KeyBanc's detailed projections include:
- AI GPU Revenue: An estimated $14 to $15 billion for 2026.
- MI355 Shipments: Approximately 200,000 units in the first half of 2026.
- MI450 Volume: 400,000 to 500,000 units in the second half of 2026.
- Helios Solution: Volume shipments are planned to commence in Q4 2026.

Should investors sell immediately? Or is it worth buying AMD?

Notably, Vinh had downgraded AMD in April 2025; since that time, the share price has more than doubled.

Structural Advantages and Market Position

Market experts point to AMD's fundamental strengths as key differentiators. Mizuho analyst Jordan Klein noted that every piece of negative news from Intel translates into a positive for AMD. AMD's strategic decision to outsource manufacturing to Taiwan Semiconductor Manufacturing Company (TSMC) has allowed it to sidestep the production challenges plaguing Intel. Furthermore, its fifth-generation EPYC server processors are reportedly in higher demand among hyperscale cloud providers than Intel's competing offerings. AMD is also demonstrating stronger revenue and margin growth, while its Instinct accelerators present a viable alternative to Nvidia in the competitive AI hardware space.

The analyst community is broadly optimistic ahead of AMD's own earnings report scheduled for February 3, 2026. KeyBanc expects Q4 2025 results to show revenue of $9.75 billion and EPS of $1.36, both exceeding consensus estimates. For Q1 2026, the bank forecasts revenue of $9.75 billion and EPS of $1.35, again well above current market expectations. Approximately three-quarters of covering analysts now rate AMD as a "Buy," with the average price target standing at $281.50.

Recent Strategic Moves

AMD has actively fortified its market position through several recent initiatives. A mid-January announcement detailed a strategic partnership with Tata Consultancy Services aimed at advancing enterprise AI adoption. At the CES 2026 exhibition, the company unveiled its MI455 data center processors, the MI440X for enterprise workloads, and provided a preview of the MI500 series slated for 2027. Bank of America analysts have suggested that major projects, including a one-gigawatt deployment for OpenAI and a 500-megawatt installation at Oracle, could generate over $20 billion in net revenue.

AMD's stock closed at $263.70 on Friday, hovering just below its 52-week high of $267.08. Since the start of the year, the equity has posted a gain of 21.3 percent, dramatically outperforming the S&P 500's modest 1 percent advance. All eyes are now on the February 3rd earnings release to see if the company can deliver on these elevated expectations.