What Happened?
Shares of computer processor maker AMD (NASDAQ: AMD) jumped 16.5% in the afternoon session after the company reported impressive first-quarter 2026 results that handily beat Wall Street expectations on nearly every metric.
Revenue surged 38% year-over-year to $10.25 billion, while adjusted earnings per share of $1.37 topped forecasts. The star of the show was the data center segment, which posted a stunning 57% jump in revenue to $5.8 billion, fueled by strong demand for its EPYC server processors and Instinct AI GPUs.
CEO Lisa Su declared data center the "primary driver" of the company's growth, a signal to investors that AMD is firmly embedded in the artificial intelligence infrastructure buildout.
What truly ignited the stock was AMD's forward guidance. The company projected second-quarter revenue of approximately $11.2 billion, a figure that exceeded analyst estimates of $10.52 billion. AMD also forecast server CPU revenue growing more than 70% year-over-year in Q2, underscoring the durability of its AI-driven momentum.
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What Is The Market Telling Us
AMD’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. But moves this big are rare even for AMD and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock gained 5% on the news that Morgan Stanley raised its price target on the stock ahead of the company's first-quarter 2026 earnings release.
The bank increased its price target to $360 from $255, citing momentum in the company's data center business. The move comes as investor anticipation builds for the chipmaker's financial results, which are due after the market close.
Enthusiasm has been driven by expectations of strong demand for its Instinct AI GPUs and wider adoption of its EPYC CPUs.
This optimism persisted despite HSBC downgrading the stock from 'Buy' to 'Hold' a day earlier. HSBC noted that the stock's recent rally, which saw it climb significantly over the previous 12 months, had already factored in a lot of good news.
AMD is up 84.3% since the beginning of the year, and at $411.80 per share, has set a new 52-week high. Investors who bought $1,000 worth of AMD’s shares 5 years ago would now be looking at an investment worth $5,287.
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