Is AMD Stock a Buy Ahead of Earnings Today?

TLDR

• AMD is set to report Q1 2026 earnings Tuesday afternoon, with Wall Street expecting revenue of $9.9 billion — up 33% year-over-year.
• Analysts also expect adjusted EPS of $1.29, with data center revenue of $5.6 billion, up 53% from last year.
• AMD stock has rallied for five straight weeks, hitting record highs near $360, well above the analyst average price target of $307.
• The stock’s forward P/E ratio stands at 53, more than double the sector median of 23, raising valuation concerns.
• Key risks include an overbought RSI, a major deal with OpenAI that may face pressure, and the possibility that strong results are already priced in.

AMD is expected to post strong first-quarter results on Tuesday afternoon, driven by growing demand from AI data centers.

Advanced Micro Devices, Inc., AMD

Wall Street expects revenue of $9.9 billion, up 33% from the same period a year ago. Adjusted EPS is forecast at $1.29, also up roughly a third year-over-year.

The stock has been on a run. AMD has gained ground in five straight weeks, pushing its market cap above $587 billion and the stock to around $360 — well above the analyst consensus price target of $307.

Data Center Is Now the Core Business

Data center revenue is projected to hit $5.6 billion in Q1, up 53% year-over-year. That would make it 57% of total sales. Two years ago, that figure was 43%.

By next year, analysts expect data center revenue to make up roughly two-thirds of AMD’s total business.

AMD has benefited from customers looking to diversify away from Nvidia, which still dominates AI computing. AMD is the only other major GPU maker, making it a natural alternative.

To win those customers, AMD has leaned on pricing. That’s contributed to declining operating margins in the data center segment — but it’s also helped land deals.

The company has contracts with both Meta Platforms and OpenAI. As part of those deals, AMD issued warrants for up to 320 million combined, tied to delivery and performance milestones. AMD expects to start shipping on those contracts in the second half of 2026.

Beyond data center, AMD’s PC, automotive, and industrial businesses are also picking up. Combined first-quarter sales for those segments are expected to rise 13% from last year.

AMD has a track record of beating analyst estimates. Its most recent quarterly results showed $10.3 billion in revenue, up 34% year-over-year, with a 17% operating margin.

Valuation and Technical Concerns

The stock’s forward P/E ratio is currently 53, compared to a sector median of around 23. That’s a stretched valuation by most measures, though the rule-of-40 metric — which factors in growth — puts the number at a more reasonable 50%.

From a technical standpoint, AMD has crossed above $265, a level that previously acted as resistance in both October 2025 and January 2026. The stock is trading above all key moving averages.

However, the Relative Strength Index and other momentum indicators are now in overbought territory. That raises the possibility of a pullback after earnings, even if the results are strong.

If the stock does pull back toward $265, analysts would view that as a normal retest of the breakout level — not necessarily a breakdown.

One specific risk worth flagging: AMD’s deal with OpenAI. OpenAI is facing increasing competition from rivals including Anthropic, and any slowdown in its spending could filter through to AMD.

For Q2, AMD is guiding for revenue of $10.5 billion, implying 38% year-over-year growth. That’s the figure the market will be watching closely alongside Tuesday’s Q1 numbers.

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