On May 6, 2026, Goldman Sachs upgraded its rating on Advanced Micro Devices (NASDAQ: AMD) to Buy from a previous rating of Neutral. Advanced Micro Devices is a semiconductor company that designs computer processors and related technologies. It competes with other major chipmakers like NVIDIA, particularly in the growing market for artificial intelligence (AI) hardware.
The upgrade follows a strong first-quarter performance where Advanced Micro Devices beat market expectations. The company reported quarterly earnings of $1.37 per share, which was higher than the Zacks Consensus Estimate of $1.30 per share. As highlighted by Zacks, this represents a significant increase from the $0.96 per share earned in the same period last year.
Revenue for the quarter also showed substantial growth, reaching $10.25 billion. This figure is a 38% increase from the $7.44 billion reported a year ago and exceeded analyst forecasts. This marks the fourth consecutive quarter that Advanced Micro Devices has surpassed consensus estimates for both its earnings and revenue, showing a consistent positive trend.
A primary driver of this success is the company's data center business. As noted by Investopedia, sales in this segment soared by 57% and now make up over half of the company's total revenue. This growth is fueled by strong demand from large-scale data centers, known as hyperscalers, and investments in AI.
Looking forward, Advanced Micro Devices anticipates revenue of around $11.2 billion for the next quarter, which is higher than the consensus analyst estimate of $10.53 billion. While its gross margin, the profit made on each dollar of sales, expanded to 55%, Seeking Alpha notes that operating expenses also rose by over 40%.
