AMD Stock Could Surge Past $665 on Explosive Data Center Demand

Shares of Advanced Micro Devices (AMD) have rallied significantly, surging more than 125% over the past three months and closing at $475.51 on June 9. While the stock's rapid ascent has raised concerns about valuation, and the last five days of trading have seen AMD stock dip by about 15%, a powerful catalyst could keep the broader rally going: booming demand for data center chips.

Wall Street remains optimistic about AMD's prospects. The highest analyst price target currently stands at $665 per share, implying roughly 46% upside from current levels over the next 12 months.

With strong demand for high-performance GPUs and CPUs, AMD's recent gains may be only the beginning.

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Here’s How AMD’s Data Center Business Performed

AMD’s first-quarter results indicated that its data center business is firing on all cylinders. Revenue from AMD’s Data Center segment surged 57% year-over-year (YoY) to $5.8 billion, making it the company’s largest business and a key driver behind overall revenue growth of 38% to $10.3 billion. The gains were driven by strong demand for EPYC server processors and Instinct AI accelerators.

One of the biggest highlights was AMD’s server CPU business. The company reported its fourth consecutive quarter of record server CPU revenue, with sales climbing more than 50% YoY. Growth was broad-based, with both hyperscale cloud customers and enterprise clients increasing purchases at a similar pace.

AMD also continued taking share in the lucrative server market. Adoption of its 5th Generation EPYC processors accelerated during the quarter, while demand for its previous-generation EPYC chips remained strong.

The company’s AI accelerator business maintained solid momentum. Revenue related to Instinct GPUs grew by a strong double-digit percentage, supported by demand from a diversified customer base.

Data Center Boom to Continue

AMD's data center business is poised for strong growth, driven by rising demand for its EPYC server processors and Instinct AI accelerators. As enterprises expand their AI infrastructure and cloud providers increase capacity investments, AMD is benefiting from multiple growth engines simultaneously.

AMD's server CPU business will remain a major growth driver. Demand from both cloud providers and enterprise customers continues to strengthen, helping the company steadily expand its footprint in the data center market.

Enterprise adoption has been encouraging. AMD continues to win new customers and deepen relationships with existing ones. These trends could support record enterprise CPU sales in the coming quarters.

The company is also preparing to launch its sixth-generation EPYC processor, Venice, later this year. Management noted that customer validation activity is running ahead of any previous EPYC generation, suggesting strong demand before the product even reaches full production.

One of the most important developments for AMD is the growing connection between AI workloads and server CPU demand. As enterprises deploy inference and agentic AI applications, CPU demand is accelerating. Thus, the rapid expansion of AI infrastructure is also increasing demand for high-performance server CPUs.

Based on current demand trends and the increasing compute requirements of AI workloads, AMD’s management expects the CPU market to grow significantly through the end of the decade.

To support this demand, AMD is working closely with manufacturing partners to expand wafer supply and backend capacity. The company now expects server CPU revenue to grow more than 70% YoY in the second quarter, with robust growth continuing through the second half of 2026 and into 2027 as next-generation EPYC products ramp.

AMD's AI accelerator business is also likely to sustain solid momentum. Data center AI revenue is expected to rise sharply as adoption of Instinct GPUs expands. AMD has already begun sampling its upcoming MI450-series GPUs and remains on track to begin production shipments of its Helios platform during the second half of the year. Management indicated that demand for the MI450 family is exceeding initial expectations, and AMD is engaging with a growing number of customers on large-scale deployments.

Can AMD Stock Reach $665?

Rising demand for EPYC server processors, accelerating adoption of Instinct AI accelerators, expanding enterprise AI spending, and the launch of next-generation products position AMD to deliver solid financials, likely pushing its share price higher.

Management expressed confidence that AMD can generate tens of billions of dollars in annual data center AI revenue by 2027 while exceeding its long-term growth target of more than 80%.

Analysts are also confident in AMD stock, giving a consensus “Strong Buy” with no analysts recommending investors sell.

Overall, strong demand and AMD emerging as one of the sector's key beneficiaries explain why its stock could hit $665, and its rally is not over yet.

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