AMD’s Stock Rallying Into Breakout Territory Ahead of Earnings – What To Expect

Advanced Micro Devices (AMD) is set to release its second-quarter earnings report today, after the market closes. Analysts expect AMD to report revenue of $7.43 billion for the June 2025 quarter, a 27.34% increase from $5.83 billion a year ago.

Despite the strong sales growth, earnings per share (EPS) are estimated at $0.48, down from $0.69 last year, indicating potential pressure on profit margins.

AMD's stock is currently trading at $179.49 in the pre-market, up 1.53% from its previous close, and having rallied an impressive 31.14% in the month leading into earnings day.

The company is seen as being set for significant growth in the AI market, with analyst projections suggesting a potential market share increase to over 30% by 2026. The company's stock has added 75% in the past 3 months, driven by AI innovations and strategic partnerships with tech giants like Meta, OpenAI, Microsoft, and Tesla.

Despite facing export challenges earlier in the year, recent relaxations of these restrictions have boosted market confidence. The significant price increase of AMD's MI350 series chips demonstrates the company's growing market power while maintaining a competitive edge against NVIDIA.

Analyst upgrades and a generally bullish sentiment have further propelled the stock upward.

Analysts are largely optimistic. Bank of America recently raised its price target on AMD to $200, reiterating a “Buy” rating. Their confidence stems from robust demand for AMD's AI-focused GPUs and CPUs, anticipating the company will exceed expectations for the second and third quarters.

Analyst Vivek Arya projects AMD could capture over 30% of the CPU market by 2026, a substantial increase from just under 20% in 2023. Citi analyst Christopher Danely also increased his price target, albeit to a more conservative $145, acknowledging improved industry trends benefiting AMD.

This positive sentiment is reflected in the stock's performance. Since mid-June, AMD shares have risen over 60%, a rally directly linked to the company's strategic forays into AI, highlighted by the unveiling of its Instinct MI350 Series accelerators.

These next-generation chips, boasting improved speed, efficiency, and scalability, have already attracted the attention of tech giants like Meta, OpenAI, Microsoft, and Tesla. AMD's collaboration with Oracle to deploy over 130,000 MI355X chips in its OCI Compute Supercluster further underscores the growing demand for its AI solutions.

Adding to the bullish narrative, AMD has reportedly increased the price of its MI350 series chips by nearly 70%, from $15,000 to $25,000. Analysts view this as a strong indicator of market confidence and AMD's increasing pricing power, especially as the MI350 series remains competitively priced against NVIDIA's Blackwell B200 chips.

Analysts have been actively tweaking their EPS outlooks ahead of earnings, 5 boosting estimates and 1 cutting them in the month leading in.

The turnaround story at AMD continues at pace, with the stock showing a V shaped recovery on the 1 year chart, after early year struggles. With sentiment high, and pricing power improving, the stock could well be set for a strong retest, or push above $180 leading in. Earnings with a stock in breakout territory, primed for volatility.