Microsoft Just Chose AMD Over Nvidia for AI Inference. What It Means for the Stock

TLDR

• AMD stock has risen 136% year-to-date, driven by AI data center demand for its CPUs and GPUs.
• Q2 FY26 revenue jumped 50%, with data center sales surging 107% year-over-year.
• Microsoft has partnered with AMD to deploy its Helios AI rack platform for frontier model inference.
• Wall Street holds a Strong Buy consensus with an average price target of $647, implying 28% upside.
• AMD trades at 68x forward earnings, a steep premium over Nvidia’s 25x, raising valuation concerns.

AMD stock is trading around $506, up 136% year-to-date, making it one of the standout performers of 2026. The rally has been fueled by surging demand for AI chips, with the company posting a 50% jump in Q2 FY26 revenue. Data center sales led the charge, climbing 107% year-over-year.

Advanced Micro Devices, Inc., AMD

CEO Lisa Su raised the bar further during the Q2 earnings call, saying AMD now expects its data center revenue to double in 2027. Server revenue is also expected to grow more than 80% annually in the second half of FY26.

… Continue reading the full article at the original source below.