Predicting AMD Stock Performance in the Year 2026

In the rapidly evolving tech landscape, Advanced Micro Devices (AMD) is making significant strides. The company has managed to secure a prestigious customer lineup that includes tech giants like Microsoft, Meta Platforms, and Oracle, among others, for its MI300 series of processors.

Looking ahead, AMD has announced plans to offer rack-scale solutions from next year. These solutions will integrate server GPUs and CPUs into a single platform, complete with advanced networking processors. This move is expected to further solidify AMD's position in the market.

The future looks even brighter for AMD, with projections indicating a 28% increase in revenue to $33 billion by 2025. The company's bottom-line growth is expected to accelerate significantly in 2026, with a projected 54% jump to $6.02 per share.

The U.S. government's decision to allow AMD to sell into the Chinese market could further boost the company's earnings in 2026. AMD's chips in 2026 are expected to pack significantly more memory than Nvidia's competing offerings, potentially attracting more customers.

AMD's MI400 processors, scheduled for release in 2026, are expected to deliver a significant performance jump from the MI300 series. The company is also planning to launch MI350 AI GPUs in 2025, promising a 35 times jump in inference performance compared to the previous generation.

The next AI chip from AMD, known as the "Medusa Point," is a Zen 6-based processor with a 3nm process. It is targeting the premium segment and features a monolithic APU design including Zen-6 cores and RDNA 3.5+ GPU units.

Currently, AMD's stock, represented by NASDAQ: AMD, trades at $151.06. If AMD trades at 33 times earnings at the end of 2026, its stock price could jump to $199, indicating potential gains of 23% from current levels.

While AMD is not currently included in The Motley Fool Stock Advisor's top 10 stocks for investors to buy right now, it's worth noting that The Motley Fool Stock Advisor has previously recommended stocks like Netflix and Nvidia, which have delivered significant returns to investors. The Motley Fool Stock Advisor's total average return is 1,052%, significantly outperforming the S&P 500.

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In conclusion, AMD's future prospects are promising, with the company poised to deliver significant performance improvements and expand its customer base. As always, investors should conduct their own due diligence before making investment decisions.