Advanced Micro Devices' stock is cruising into record territory as enthusiasm continues to build around the company's business of supplying central processing units for servers.
Shares of AMD $(AMD)$ rose 7.8% in Thursday trading, to $278.26, their first closing high since Oct. 29, 2025, when they finished at $264.33. The stock is up for the 12th session in a row, rising 41% over this span. The winning streak is AMD's longest since 2005, according to Dow Jones Market Data.
While AMD's massive stock rally dovetails with general market momentum, there's also particular optimism around AMD's story. Whereas once the company was seen as simply chasing Nvidia (NVDA) in the market for graphics processing units, now investors are upbeat around another aspect of AMD's business: CPUs that play a growing role in data centers thanks to the rise of agentic artificial intelligence.
As agentic AI takes off, server CPUs have come to be seen "as indispensable assets," TD Cowen analyst Joshua Buchalter wrote in a note to clients last week.
The CPU boom adds to the excitement around AMD's next earnings report, expected out in early May. Whether good news is already baked into the stock price, however, is another matter.
Bernstein's Stacy Rasgon wrote that "AMD has been better at anticipating and capitalizing on the current server surge," but Wall Street expectations already seem to call for a 50% rise in server sales relative to a year before.
Analysts note that GPU momentum will be an important determinant of the stock's direction, as investors assess whether the Instinct MI400 is catching on.
In GPUs, "AMD's sales have been much smaller" than Nvidia's, "but there's a view that they're gaining traction," Rasgon told MarketWatch.
The company struck a major deal with Meta (META) in February, following one with OpenAI that was announced in October. Admittedly, the arrangements come with financial tradeoffs. For instance, as part of its deal with Meta, AMD issued the Facebook parent company a warrant to purchase up to 160 million shares of its common stock, which equates to roughly 10% of the company.
"They've signed big deals," Rasgon noted. "You'd like to see them do that without giving away big chunks of the company."
Ideally, you would want to see "that the customers are buying their parts because they actually want their parts," he added. But AMD is trying to catch up with Nvidia, and the hope is that as its own products get better, customers will want them in their own right.
Comments