Wedbush Sees AMD’s Data Center Business Growing Ahead of Expectations. What That Means for Investors Here.

Advanced Micro Devices (AMD) stock has climbed sharply in 2026, rising 100.6% year-to-date (YTD) and lifting its market cap to $741.3 billion. Much of that move comes down to its data center business. 

In its Q1 2026 report on May 4, AMD reported 37.8% year-over-year (YOY) revenue growth, beating consensus estimates by 3.6%. Data center revenue rose 57% from a year earlier. The company also guided for 46% YOY growth in Q2 revenue at the midpoint, keeping expectations high ahead of its next report.

Wedbush has raised its Advanced Micro Devices price target twice in July. Its latest call points to new partnerships with Microsoft (MSFT) and Anthropic, which it sees as “the start of a sharp AI ramp” for AMD's data center business. Server CPU revenue is expected to grow by more than 70% YOY in Q2, while demand is expected to remain strong through 2027.

How much further can Wedbush’s data center view push Advanced Micro Devices before the business needs to match the market’s high expectations?

Results Point to Stronger Momentum

Advanced Micro Devices makes chips for data centers, AI workloads, and everyday computing, selling to cloud providers, businesses, and consumers.

The stock has surged 142.1% over the past year and is up 27.42% in the last three months..

That run has pushed its valuation well above peers, with a forward price-to-earnings ratio of 78.94 times compared to the sector average of 23.42 times.

The numbers back up the momentum. In Q1 2026, Advanced Micro Devices reported $10.3 billion in revenue, up 37.8% from a year ago and above estimates. Adjusted EPS came in at $1.37, also ahead of expectations. Margins improved as the business scaled, with gross margin at 53% (55% non-GAAP) and operating margin rising to 14.4% from 10.8% last year. 

The data center unit continues to lead, bringing in $5.8 billion, up 57%, helped by strong demand for EPYC CPUs and growing Instinct GPU shipments. Other segments held up as well, with client and gaming revenue up 23% and embedded up 6%. Looking ahead, the company expects $11.2 billion in Q2 revenue, above consensus, pointing to steady demand rather than a slowdown.

Wedbush’s Bullish Case for AMD

Wedbush, led by analyst Matt Bryson, is leaning on real demand. The firm raised its price target on Advanced Micro Devices to $600 from $450 and kept its “Outperform” rating after the company’s Advancing AI 2026 event.

The call is tied to two key customer wins. Microsoft plans to use Advanced Micro Devices’ next-gen Instinct GPUs and EPYC CPUs in Azure through its Helios AI system, with shipments starting in the second half of 2026. At the same time, Anthropic is set to deploy up to 2 gigawatts of Instinct MI450 GPUs in Helios systems from the first half of 2027. AMD said it could invest up to $5 billion to expand that partnership.

And, technology continues to progress. A new partnership with Cerebras (CBRS) combines Helios systems with its Wafer-Scale Engine to handle fast AI inference, with performance up to 5x better in tokens per watt than using Cerebras alone. Supply is improving too, which should help Advanced Micro Devices meet rising demand.

Wedbush has lifted its forecasts to match that trend, now expecting $49.2 billion in 2026 revenue and $7.22 in EPS, up from $47.2 billion and $6.95. For 2027, it sees revenue reaching $81.2 billion and EPS hitting $14.74. The firm expects partners like Super Micro Computer (SMCI), Dell Technologies (DELL), Samsung Electronics, Micron Technology (MU), and Cerebras to benefit as the ecosystem grows.

Wedbush Sees Room for More

Advanced Micro Devices is set to report earnings on Aug. 4 after the close, and expectations are high. Analysts are looking for $1.35 in earnings per share for the June 2026 quarter, up from $0.27 a year ago, a 400% jump. For the full year, estimates point to $6.27 per share, up 91.74% from $3.27.

UBS analyst Timothy Arcuri raised his price target ahead of the company’s Advancing AI event and now calls Advanced Micro Devices his top semiconductor pick. He points to stronger CPU and GPU products, new AI deals, and a growing list of data center customers. He also noted that supply chain checks suggest demand could stay strong through 2027.

Jefferies analyst Blayne Curtis is also bullish, keeping a “Buy” rating with a $615 price target. Across the board, sentiment is strong.

All 45 analysts covering the stock rate it a consensus “Strong Buy”, with an average target of $580.66, implying 35.18% upside from current levels.

Conclusion

Wedbush’s thesis is credible because it rests on concrete customer commitments, improving supply, and an earnings outlook that points to sustained data center expansion through 2027. Still, AMD’s 2026 rally has left little room for execution setbacks, with its forward valuation already far above the broader sector. The most likely direction for shares remains higher if upcoming results confirm that Instinct GPU shipments, EPYC demand, and Helios deployments are tracking to plan. But gains are likely to be more uneven from here, as AMD must consistently deliver on expectations that are already ambitious.