Why is AMD stock soaring 2% today: here’s why upside may continue

Advanced Micro Devices (NASDAQ: AMD stock) continued the rally on Thursday after Wall Street’s most bullish analysts unleashed fresh upgrades focused on extraordinary demand for the chipmaker’s server processors.

KeyBanc Capital Markets analyst John Vinh told clients that demand from hyperscalers has left AMD nearly depleted of server CPUs for the entire year, a constraint that could force a 10 to 15% price increase in the coming quarter.

The move underscores a broader awakening on Wall Street to AMD’s improving position in the trillion-dollar artificial intelligence infrastructure buildout.​

AMD stock: Catalysts behind the rally

The timing of the recent upgrades coincides with what AMD showed off at CES earlier this month.

The chipmaker unveiled its Ryzen AI 400 Series, a new generation of AI-enabled PC processors designed to bring artificial intelligence features to everyday laptops and desktops.

The new chips promise 1.3 times faster multitasking and are 1.7 times quicker at content creation tasks compared to competitors, according to AMD’s benchmarks.

Adoption of AMD’s AI PCs has already doubled year-over-year and now spans more than 250 platforms.​​

But the real money isn’t in consumer laptops. It’s in data centers.

Bernstein analyst Stacy Rasgon, who has been cautious on AMD historically, is becoming increasingly bullish on the company’s server business.

She projects that AMD’s high-performance EPYC server processors could grow 30% in 2026 and that AI-related revenues will gain momentum.

KeyBanc’s Vinh estimates AI-focused revenues alone could hit $14 billion to $15 billion in 2026, a staggering growth for a company that generated around $30 billion in total revenue last year.​

The supply constraint is crucial to understanding the upside.

If AMD is nearly sold out of server CPUs for 2026, the company has pricing power.

A 10 to 15% price increase would flow directly to the bottom line, boosting profit margins at a time when investor sentiment is already turning positive.

What investors are watching next

The real test arrives February 3, when AMD reports fourth-quarter 2025 earnings. Wall Street expects the company to beat both earnings and revenue estimates.

What matters more is forward guidance. If executives signal strong server demand and acknowledge the supply shortage, the AMD stock could accelerate toward analyst price targets now clustering in the $260 to $300 range. ​

Valuation does merit caution. AMD stock trades at a P/E multiple of 123 times earnings, meaning investors are pricing in substantial growth for years ahead.

A miss on guidance or any signal that demand is slowing would trigger sharp selling.

Additionally, the chipmaker faces ongoing competition from Nvidia on AI GPUs and from Intel, which is fighting to regain data center share.

The fundamentals, though, are strengthening.

With inventory nearly exhausted, pricing power intact, and AI infrastructure investment accelerating globally, AMD has momentum heading into 2026.

The post Why is AMD stock soaring 2% today: here’s why upside may continue appeared first on Invezz