Key Points
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In April, AMD stock got a strong tailwind from the overall market’s strength, but also had plenty of company-specific catalysts.
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Catalysts include TSMC’s robust results, a deepened AI partnership with France, and further increases in AI capital expenditures by the big technology companies.
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AMD is scheduled to report its first-quarter results on Tuesday, May 5.
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Shares of Advanced Micro Devices (NASDAQ: AMD), which primarily makes central processing units (CPUs) and graphics processing units (GPUs) for enabling artificial intelligence (AI) in data centers, rocketed 74.3% in April, according to data from S&P Global Market Intelligence. To say this is an amazing monthly performance for a large-cap stock is a great understatement.
For context, shares of AI GPU leader Nvidia gained 14.4% in April. For additional context, last month the S&P 500 index returned 10.5%, and the tech-heavy Nasdaq Composite index returned 15.3%.
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So, AMD stock got a brisk tailwind from the overall market’s strength. Indeed, both major indexes notched all-time highs in April, with each posting its best monthly performance since 2020.
But Advanced Micro Devices also had plenty of company-specific catalysts.
Image source: Getty Images.
TSMC’s great results
On April 16, Taiwan Semiconductor Manufacturing (NYSE: TSM) reported fantastic quarterly results, driven by “extremely robust” demand for AI chips, CEO C.C. Wei said on the earnings call. Earnings per share (EPS) surged 58% year over year, sprinting by Wall Street’s expectation.
This event likely provided a tailwind for AMD because TSMC is the world’s largest chip foundry and AMD’s primary foundry. Thus, TSMC’s robust results can be interpreted as a positive for the AI chip space.
AMD stock rose 7.8% on April 16. It’s likely that the following event also boosted AMD stock on April 16.
A multi-year, deepened partnership with France
On April 16, AMD and the French government announced plans for a multiyear “deepened collaboration” aimed at “accelerating local AI innovation, expanding access to open and advanced compute resources for the local AI ecosystem, and strengthening France’s position in the global AI landscape.”
This partnership can be viewed as a win over Nvidia, which has particular strength in the sovereign AI market.
Wall Street ratings and price target upgrades
During April, AMD stock was boosted by several Wall Street firms that upgraded their ratings and raised their price targets.
A major price hike came on April 29, when Susquehanna raised its price target to $375 from $300, maintaining a buy rating. AMD stock jumped 9.7% during the two days from April 29 to April 30. (Shares closed at $360.54 on May 1.)
Big Tech plans continued increases in AI capital expenditures (“capex”)
So, why were Wall Street analysts so bullish on AMD stock (and other AI stocks) throughout April?
One main reason is that they track the planned capex spending of big technology companies, the bulk of which has been on AI for some time. The major hyperscalers (operators of massive data centers) announced their quarterly results in April, and planned capex spending remains extremely robust. That’s great news for companies that supply AI chips and other components and services to build-out AI data centers.
Look for Q1 results on May 5
AMD is scheduled to release its first-quarter 2026 report on Tuesday, May 5, after the market close. Wall Street is expecting revenue to climb 33% year over year to $9.89 billion, and adjusted earnings per share (EPS) to jump 34% to $1.29.
In short, Advanced Micro Devices is firing on all cylinders with strength in GPUs and CPUs and is having success in inking some big partnerships. Its stock is worth considering buying.
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Beth McKenna has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy.
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