Why a New Core Scientific Deal Is a Big Win for AMD Stock

Technology stocks, once the market's biggest winners thanks to the artificial intelligence (AI) boom, have suddenly fallen out of favor on Wall Street. Even companies posting blockbuster earnings are finding it difficult to impress investors, as lofty expectations, growing fears of an AI bubble and concerns over whether the industry's massive spending spree will ultimately pay off have made the market far less forgiving. And Advanced Micro Devices (AMD) is one of the latest casualties of this shift in sentiment.  

Although the chipmaker has yet to report its next earnings results, investors have become increasingly cautious about AI-related financing deals and whether hyperscalers' enormous AI investments can deliver sustainable returns. As a result, AMD shares have fallen 17.2% from their June all-time high of $584.73. But while many investors have turned cautious, Wedbush Securities believes the market may be missing the bigger picture. The investment firm sees AMD's newly announced partnership with Core Scientific (CORZ) as a key step that could expand the company's AI reach beyond the largest cloud providers and fuel its long-term growth. 

So, what makes this deal so important, and why is it keeping Wedbush bullish on AMD? 

About AMD Stock

Advanced Micro Devices has grown from a longtime challenger in the semiconductor industry into one of the biggest names powering today's AI revolution. Founded in 1969 and headquartered in Santa Clara, California, the company designs the processors and graphics chips that drive personal computers, gaming consoles, data centers, and increasingly, AI applications. Today, AMD competes with industry heavyweights such as Intel (INTC) in CPUs and Nvidia Corporation (NVDA) in AI accelerators and graphics processing.

AMD's product portfolio spans Ryzen processors for consumer PCs, EPYC server chips for cloud and enterprise customers, Radeon graphics cards for gaming, and Instinct GPUs built for AI and high-performance computing. Its technology is used by leading cloud providers, businesses, and gaming giants, including Sony's PlayStation and Microsoft's (MSFT) Xbox. The company's reach expanded further after its acquisition of Xilinx in 2022, giving AMD a stronger foothold in embedded computing, communications, automotive, and industrial markets.

Over the past decade, AMD has undergone a remarkable turnaround under CEO Lisa Su. Once viewed as an underdog in the chip industry, the company has steadily gained market share through competitive product launches and a growing presence in the lucrative data center market. As AI adoption accelerates, AMD is now investing aggressively to challenge Nvidia's dominance in AI hardware, making it one of the most closely watched semiconductor companies on Wall Street.

Yet, despite AMD's strong business momentum, its stock has come under intense pressure in recent weeks. The sell-off has been driven less by concerns over the company's fundamentals and more by growing skepticism surrounding the AI trade. As investors question whether the industry's unprecedented AI spending can generate meaningful long-term returns, even some of the sector's strongest companies have found themselves caught in the crossfire.

Currently valued at $700.44 billion, AMD has been no exception. The stock has tumbled 16.33% over the past month, including a steep 9.94% decline in just the last five trading sessions, as the broader technology sector has grappled with weakening investor sentiment. But despite the recent pullback, AMD's longer-term performance remains difficult to ignore. 

The stock has surged an impressive 170.8% over the past year and is still up 127% so far in 2026, handily outperforming the broader S&P 500 Index ($SPX), which has gained 16.4% over the past year and 8.2% year-to-date (YTD). While near-term sentiment has turned cautious, AMD clearly continues to be one of the standout performers in the semiconductor sector.

AMD’s Q1 Earnings Snapshot

AMD reinforced its position as one of the semiconductor industry's fastest-growing companies when it reported outstanding fiscal 2026 first-quarter results on May 5. The chipmaker comfortably exceeded Wall Street's expectations on both the top and bottom lines, giving investors fresh confidence in its AI growth story. The strong performance was well received by the market, with AMD shares surging 18.6% in the following trading session. 

Revenue jumped 38% year-over-year (YOY) to $10.25 billion, well ahead of analysts' estimate of $9.85 billion, and up significantly from $7.44 billion in the same quarter last year. The company's earnings growth was just as impressive. Non-GAAP earnings per share rose 43% YOY to $1.37, topping Wall Street's forecast of $1.30, while GAAP net income nearly doubled to $1.38 billion. The results underscored AMD's ability to convert booming AI demand into stronger profits as its high-margin AI business continues to scale.

The Data Center business once again stole the spotlight, cementing its role as AMD's primary growth engine. Revenue from the segment surged 57% YOY to $5.78 billion, driven by strong demand for EPYC server processors and increasing shipments of Instinct AI accelerators. However, AMD's strength wasn't limited to AI infrastructure. Its Client and Gaming businesses also delivered solid performances, with combined revenue climbing 23% YOY to $3.61 billion.

Within that, the Client segment generated $2.9 billion in revenue, up 26% from a year earlier, supported by healthy demand for Ryzen processors and continued market-share gains. Meanwhile, Gaming revenue increased 11% to $720 million, as solid demand for Radeon graphics cards more than offset weakness in the semi-custom business. Profitability continued to improve, with non-GAAP gross margin expanding to 55%, up from 54% a year ago, reflecting the growing contribution of AMD's higher-margin AI and data center portfolio.

Management expects that momentum to continue. AMD is scheduled to report its fiscal 2026 second-quarter results after the market closes on Tuesday, Aug. 4, in what will be another closely watched update for investors assessing the strength of AI demand. For the quarter, the company expects revenue of approximately $11.2 billion, plus or minus $300 million. At the midpoint, that guidance points to roughly 46% YOY growth and 9% sequential growth. Additionally, AMD expects non-GAAP gross margin to improve further to around 56%, signaling management's confidence that demand for its AI chips and data center products remains robust.

Why Wedbush Remains Bullish on AMD

Wedbush Securities believes AMD's recently announced partnership with Core Scientific could become a major long-term growth driver. Under the deal, AMD will gain access to more than 500 megawatts of data center capacity, giving it an opportunity to expand the availability of its AI chips beyond the major hyperscale cloud providers. 

“We see this deal as a means for AMD to increase the availability of its solutions beyond hyperscale customers (similar to NVDA's reach via its neocloud customers/ partners),” said Wedbush analyst Matt Bryson in a note to clients.

Nevertheless, Bryson acknowledged that the agreement is also tied to the broader concerns weighing on AI stocks. Because AMD is helping support the infrastructure buildout, the partnership could fuel ongoing worries about "circular financing" and whether the industry's aggressive spending is sustainable. Still, Wedbush noted that it has not seen any signs of AI investments slowing, with smaller data center operators reportedly expecting to recover their investments in three years or less.

Indeed, the agreement has significant room to grow. While it initially provides AMD access to more than 500 megawatts of data center capacity, the partnership could eventually expand to 2.5 gigawatts. AMD and Core Scientific will work together on the design and deployment of AI infrastructure powered by AMD's Instinct GPUs, EPYC processors, and ROCm software. As part of the deal, AMD will receive market-priced warrants to purchase Core Scientific shares, subject to certain conditions.

How Do Analysts View AMD Stock?

Wedbush isn't the only firm optimistic about AMD's prospects. Overall, Wall Street remains overwhelmingly bullish on the chipmaker, with the stock earning a consensus "Strong Buy" rating. Among the 45 analysts covering AMD, 35 rate it a "Strong Buy," two recommend "Moderate Buy," while the remaining eight suggest "Hold." Analysts also see meaningful upside ahead. 

The average price target of $580.66 implies the stock could climb 20% from current levels. Meanwhile, the most optimistic target on Wall Street stands at $1,250, suggesting a potential upside of as much as 158.3% if AMD continues to execute on its long-term growth strategy.