Shares of Advanced Micro Devices (AMD) have delivered a strong performance over the past year, significantly outperforming competitor Nvidia (NVDA). Indeed, AMD stock has climbed 95% over the last 12 months, compared to a gain of around 50% for NVDA stock. Despite this impressive rally, however, AMD has cooled in 2026 and now trades about 26% below its 52-week high.

While the stock has cooled off a bit, AMD's underlying business fundamentals remain solid. Strong demand for the company’s server central processing units (CPUs) and Instinct graphics processing units (GPUs) continues to support growth. AMD has steadily strengthened its position in the high-performance computing market, with its data center segment growing rapidly and positioning the firm to deliver solid growth. Rising capital investment by enterprise and cloud customers in advanced computing infrastructure is expected to further sustain demand for AMD's data center solutions.

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Momentum is also evident across the company's broader product portfolio. AMD is seeing accelerating demand across several major markets, including data centers, personal computers, gaming, and embedded systems. The company has captured meaningful market share in both server and PC processors while rapidly expanding its data center AI business. This growth has been supported by increasing adoption of its Instinct GPUs and software platform among cloud providers, enterprises, and AI developers.

Factors Support a Rally in AMD

Strong demand trends, an expanding product portfolio, and an improving valuation indicate that AMD stock is poised for a significant rebound. Supporting AMD’s growth is its rapidly expanding data center business. The segment is benefiting from rising demand for high-performance computing and AI workloads.

In the fourth quarter of 2025, the data center segment generated $5.4 billion in revenue, representing a 39% year-over-year (YOY) increase. Much of this growth was driven by the launch of the AMD Instinct MI350 Series GPUs, which helped drive a noticeable rise in data center sales.

Supporting the segment’s growth are server processors. Adoption of AMD’s fifth-generation EPYC CPUs accelerated significantly, accounting for “more than half of the total server revenue.” This growing uptake highlights the increasing competitiveness of AMD’s server offerings.