Advanced Micro Devices is attracting renewed Wall Street attention as analysts anticipate stronger demand for the company’s EPYC server processors ahead of its second-quarter earnings report.
Susquehanna analyst Christopher Rolland raised his AMD stock price target to $500 from $450 while maintaining a Positive rating. The analyst expects better second-quarter results, driven primarily by upside in server CPUs and, to a lesser extent, stronger personal-computer production.
The upgrade highlights an increasingly important part of AMD’s investment case. Although the company is commonly discussed as a challenger to Nvidia in AI accelerators, conventional server processors are also benefiting from the rapid expansion of artificial-intelligence infrastructure.
AMD is scheduled to publish its fiscal second-quarter 2026 results after the market closes on August 4. The company previously forecast approximately $11.2 billion in revenue, plus or minus $300 million, representing about 46% year-over-year growth at the midpoint.
For investors, the key issue is whether stronger EPYC demand can produce an earnings beat while supporting AMD’s broader push into AI computing.
Why Susquehanna Raised Its AMD Price Target
Susquehanna’s higher price target appears to reflect expectations that AMD’s server CPU business will outperform previous assumptions.
Server CPUs are the central processors used in cloud data centers, enterprise servers and high-performance computing systems. Although AI accelerators handle many complex model-training and inference calculations, CPUs remain essential for managing data, operating applications and coordinating the wider computing system.
Demand can therefore increase alongside AI GPU deployments rather than being displaced by them.
AMD said after its first-quarter results that data-center products had become the primary driver of its revenue and earnings growth. Chief Executive Lisa Su also said the company expected server growth to accelerate meaningfully as additional supply became available.
Susquehanna’s revised forecast suggests that this acceleration may already be visible in customer orders and supply-chain activity.
Rolland also cited improved PC original-design-manufacturer builds. An ODM manufactures computers or components for larger consumer brands. Stronger production can signal improving demand for Ryzen processors, although the server business appears to be the more important reason for the upgrade.
The $500 price target is an analyst estimate rather than a guaranteed future stock price. Its usefulness depends on whether AMD delivers the revenue, margins and earnings assumed in Susquehanna’s valuation model.
AMD’s Server CPU Business Is Gaining Strategic Importance
AMD’s EPYC processors compete primarily with Intel’s Xeon products in the x86 server market.
The company has gained ground over several product generations by offering high core counts, energy efficiency and competitive total ownership costs. Lower electricity consumption is particularly important for data-center operators because power has become one of the largest constraints on AI infrastructure expansion.
AMD’s server opportunity is no longer limited to conventional enterprise workloads. AI systems also need host CPUs to manage accelerators, networking, storage and operating software.
That creates a secondary benefit from the AI investment cycle. Hyperscalers may purchase AMD Instinct GPUs, but they may also deploy EPYC processors in systems using accelerators from AMD or other suppliers.
During the first quarter, AMD highlighted expanded EPYC availability through Amazon Web Services, Google Cloud, Microsoft Azure and Tencent Cloud. Meta was also identified as a lead customer for AMD’s upcoming sixth-generation EPYC processors, codenamed Venice and Verano.
These partnerships increase the number of workloads available on AMD hardware and can strengthen the company’s credibility with enterprise buyers.
AI Workloads Could Increase CPU Demand
Graphics processors receive most of the attention in the AI semiconductor market because they perform the large volumes of parallel calculations required to train and run sophisticated models.
However, a complete AI data center contains much more than GPUs.
CPUs prepare data, execute operating systems, run databases and coordinate requests between accelerators. Emerging agentic AI applications may require particularly intensive CPU resources because they involve multiple models, software tools and data sources interacting in real time.
This trend could increase the number and value of CPUs required for each AI deployment.
AMD’s strategy is to sell a wider portfolio that includes EPYC CPUs, Instinct accelerators, networking technology and rack-scale systems. A broader offering could allow the company to capture more revenue from each data-center project rather than competing in only one chip category.
Recent customer announcements reinforce that approach. AMD has disclosed expanded infrastructure relationships with Meta, Microsoft and Anthropic involving combinations of Instinct GPUs and EPYC processors.
The opportunity is substantial, but AMD must demonstrate that these agreements translate into recognized revenue, improving margins and sustainable free cash flow.
What to Expect From AMD Q2 2026 Earnings
AMD’s second-quarter report will be the immediate test of Susquehanna’s bullish thesis.
Management’s official outlook calls for revenue of approximately $11.2 billion, within a range of $10.9 billion to $11.5 billion. The midpoint implies sequential growth of roughly 9%. AMD also expects a non-GAAP gross margin of approximately 56%.
Investors will focus on whether revenue exceeds the upper half of that range and whether management raises its full-year expectations.
A strong result would likely require continued momentum across server CPUs and AI accelerators. The Client and Gaming businesses could also contribute when PC production improves, but data-center performance will probably have the greatest influence on market sentiment.
During the first quarter, AMD generated $10.3 billion in revenue, GAAP operating income of $1.5 billion and non-GAAP earnings of $1.37 per share. Non-GAAP gross margin reached 55%.
A higher Q2 margin would indicate that stronger sales are translating into improved profitability rather than being offset by product-mix pressure or rising expenses.
EPYC Supply and Market Share Will Be Critical
Strong demand alone does not guarantee higher revenue. AMD must also secure enough advanced manufacturing capacity to fulfill customer orders.
The company relies heavily on Taiwan Semiconductor Manufacturing Company for leading-edge chip production. Supply availability can therefore limit growth when demand rises faster than AMD’s allocated wafer capacity.
Management has already said that server growth should accelerate as the company scales supply. Investors should listen for evidence that production constraints are easing and that AMD can support larger customer deployments during the second half of 2026.
Market share will also matter.
AMD can expand server revenue through industry growth, price increases or gains against Intel. The strongest scenario would combine all three. Higher share would indicate that customers are choosing EPYC processors for technical and economic reasons rather than merely purchasing them because competing products are unavailable.
However, Intel is also benefiting from rising data-center CPU demand. Competition could intensify as both companies introduce new server platforms and seek long-term cloud contracts.
Risks Behind the Bullish AMD Outlook
The increased AMD stock price target reflects optimism, but the shares still face several risks.
First, AMD must execute in two highly competitive data-center markets simultaneously. It competes with Intel in server CPUs and Nvidia in AI accelerators. Each market requires substantial research, software development and customer support.
Second, elevated expectations can make the stock vulnerable even when reported results are objectively strong. Investors may already be pricing in a server CPU beat, improved guidance and continued AI customer wins.
Third, large customer agreements can create concentration risk. Hyperscalers have significant purchasing power and may develop more internal chips over time.
AMD’s valuation also depends increasingly on revenue expected in later years. Delays involving the Venice CPU platform, Instinct accelerators or rack-scale systems could weaken confidence in long-term analyst forecasts.
Finally, geopolitical restrictions and export controls may limit sales of advanced processors to certain markets.
What AMD Investors Should Watch Next
The most important Q2 metric will be Data Center segment growth, particularly management’s commentary about EPYC demand.
Investors should also watch gross margin, supply availability and the revenue outlook for the third quarter. An earnings beat accompanied by cautious guidance would provide less support than strong results combined with an improved forecast.
Updates concerning Venice processors, Instinct MI450 products and large-scale customer deployments will help determine whether AMD can sustain growth beyond the current quarter.
Susquehanna’s $500 target reflects confidence that server CPUs can add meaningful upside to AMD’s earnings trajectory. The August 4 report will show whether recent demand is strong enough to justify that optimism.
FAQ
What is Susquehanna’s new AMD stock price target?
Susquehanna raised its AMD price target to $500 from $450 and maintained a Positive rating on the shares.
Why did Susquehanna raise the AMD price target?
The firm expects better second-quarter results, primarily because of stronger server CPU demand and some improvement in PC manufacturing activity.
When will AMD report Q2 2026 earnings?
AMD is scheduled to report its second-quarter 2026 financial results on August 4, 2026, after the US market closes.
What revenue has AMD forecast for Q2 2026?
AMD expects approximately $11.2 billion in revenue, plus or minus $300 million, with a non-GAAP gross margin of around 56%.
What is the biggest risk for AMD stock?
A major risk is that high expectations for server CPUs and AI accelerators outpace AMD’s actual revenue growth, supply capacity or ability to improve profitability.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making any investment decisions.
