I keep hitting the buy button on AMD because Lisa Su has stopped chasing NVIDIA and started co-designing the next phase of AI infrastructure alongside it. Every few months I tell myself the position is full, and every few months AMD (NASDAQ:AMD | AMD Price Prediction) gives me a fresh reason to add. The May earnings report was the latest one, and I have been adding into it ever since.
Here is what pulls me back. AMD is a fully integrated rack-scale AI vendor now, with Meta, AWS, Google Cloud, Microsoft Azure, Tencent, and OpenAI all signing multi-year roadmaps against EPYC CPUs and Instinct accelerators. The Meta deal alone covers up to 6 gigawatts of AMD Instinct GPUs, the OpenAI partnership another 6 gigawatts, and Oracle is standing up the first public AI supercluster on Helios with 50,000 GPUs in Q3 2026. That is the part of the story I think the market still underprices.
The numbers that keep me buying
The first reason is the engine. Q1 2026 revenue came in at $10.25 billion, up 37.85% year over year, with the Data Center segment at $5.78 billion and 57% growth. Non-GAAP EPS of $1.37, beating the $1.2939 consensus estimate. Q2 guidance points to roughly $11.2 billion in revenue, about 46% year over year, with server CPU revenue expected to grow more than 70% year over year. That is acceleration, not deceleration, in the same window the bears swore would crack.
The second reason is visibility. Lisa Su told analysts she now sees “tens of billions of dollars in annual Data Center AI revenue in 2027” and a server CPU total addressable market climbing to over $120 billion by 2030, where she expects to capture greater than 50% share. The long-term EPS target she put on the table is more than $20. I am willing to underwrite that because she has delivered every architectural milestone she has promised for a decade.
The third reason is the balance sheet behind the ambition. AMD ended Q1 with $5.59 billion in cash, a debt-to-equity ratio of 0.071, and interest coverage of 28.2x. Full-year 2025 free cash flow hit $5.52 billion, up 129.48%, and Q1 alone produced $2.57 billion in free cash flow, up 252.96%. The company bought back $1.316 billion of stock in FY2025. This is a fortress funding an offensive.
The risk I refuse to look away from
Two things genuinely worry me. The valuation is rich at a P/E above 200, and U.S. export controls on the MI308 already cost AMD roughly $440 million in net inventory and related charges in FY2025. Geopolitics can take a knife to the China line at any moment. I keep buying anyway because the Meta, OpenAI, and hyperscaler commitments sit outside that China exposure entirely, and a forward P/E of 74 against guided 46% revenue growth is a multiple I can live with on a name compounding free cash flow this fast.
Why the buy button stays active
Lisa Su is engineering the only credible portfolio that can sell a customer the CPU, the GPU, the rack, and the software in one conversation. As long as she keeps pulling 2027 demand forward and the free cash flow keeps tripling, I will keep adding to AMD with both hands.
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