By Daniel Sparks
Publication Date: 2026-05-10 08:41:00
The biggest chip stocks have stolen the spotlight throughout the artificial intelligence (AI) boom. Nvidia is the obvious headliner, and Intel has staged a surprising recovery in recent months. But there’s another chip stock grabbing the market’s attention — especially recently.
I’m talking about Advanced Micro Devices (AMD +11.44%). Up about 112% year to date as of this writing and trading near a 52-week high after a recent post-earnings pop, AMD has gone from a laggard to one of 2026’s standout performers. Its stock has skyrocketed about 350% over the past 12 months as investors have piled in on optimism that the chipmaker is becoming a genuine second source for AI computing.
But has the stock’s valuation become too stretched?
Image source: Getty Images.
An accelerating growth story
AMD’s first-quarter revenue rose 38% year over year to $10.3 billion — an acceleration from 34% growth in the fourth quarter of 2025. Non-GAAP (adjusted) earnings per share rose 43%. And free cash flow more than tripled year over year to a record $2.6 billion.
The story here, of course, is the data center segment. The unit, which sells AMD’s EPYC server CPUs and Instinct GPU accelerators, generated $5.8 billion in revenue — a 57% year-over-year jump that easily outpaced the 39% growth seen in the fourth quarter.
AMD chair and CEO Lisa Su explained on the company’s first-quarter earnings call what’s behind the surge.
“And what we’ve seen is all of the things that we believed in terms of…