Where Will AMD Stock Be in 2026?

Key Points

• AMD can challenge Nvidia's dominance in AI chips next year and witness stronger growth in its data center revenue, thanks to its product development moves.

• The company's earnings growth is expected to be much higher in 2026.

• AMD stock seems capable of delivering more upside thanks to an acceleration in its bottom line next year.

• 10 stocks we like better than Advanced Micro Devices ›

Advanced Micro Devices (NASDAQ: AMD) stock delivered fairly decent returns of 26% on the stock market so far in 2025, which is almost double the gains registered by the PHLX Semiconductor Sector index this year. The stock's rise can be justified by its consistently solid growth in recent quarters, though investors may now be wondering if it is worth buying AMD following its impressive jump in 2025.

The good part is that AMD's performance in 2026 could turn out to be much better than what it has been clocking this year. Let's see why that's likely to be the case, and check how much upside could be in store for AMD investors next year.

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AMD's new AI chips could lift its growth in 2026

AMD fell way behind Nvidia in the artificial intelligence (AI) data center graphics processing unit (GPU) market. This is evident from the 56% year-over-year growth in Nvidia's data center revenue in the previous quarter to a whopping $41 billion. AMD's data center revenue growth, meanwhile, increased by just 14% year over year last quarter to $3.2 billion.

Both companies faced a similar headwind in the form of restrictions on the export of data center GPUs to China. However, Nvidia's growth rate and the scale of its data center business clearly show that it is the dominant player in the AI GPU market. But then, AMD isn't going to let Nvidia have a free run in this lucrative space.

The company lined up new chip launches in 2025 and 2026 that could help it claw back some share from Nvidia. Its MI350 AI GPUs are set to be launched this year, with AMD promising that they will bring a 35 times jump in inference performance as compared to the previous generation of chips. AMD already built a solid customer lineup, consisting of Microsoft, Meta Platforms, and Oracle, among others, which are using its MI300 series of processors already.

AMD could win more customers for its MI400 processors in 2026, considering that this chip is likely to deliver a massive jump in performance from the MI300 series. Additionally, AMD's chips are expected to pack significantly more memory than Nvidia's competing offerings next year.

Another thing worth noting is that AMD will offer rack-scale solutions from next year that will integrate its server GPUs and central processing units (CPUs) into a single platform with the help of advanced networking processors.

In all, it would be wrong to write off AMD in the AI chip market, even though the company is way behind its bigger rival. Moreover, a massive $5.2 trillion is expected to be spent on building data centers by 2030, per McKinsey, and 60% of that will go toward procuring chips and other computing hardware. So, AMD hasn't exactly missed the bus in the AI chip market yet, as there is a lot of opportunity for more than one player to exist in this market.

More importantly, AMD's new chip launches could start helping it win a bigger share of the AI chip market from 2026, and that's likely to translate into stronger growth for the company.

The stock could head significantly higher next year

Analysts are expecting a 28% increase in AMD's revenue in 2025 to $33 billion. This is expected to be followed by another 20%-plus increase next year to just over $40 billion. However, AMD could end up delivering faster-than-expected growth thanks to new chip launches.

Moreover, AMD's bottom-line growth is projected to accelerate significantly next year. Consensus estimates project a 54% jump in its bottom line in 2026 to $6.02 per share. AMD's earnings growth this year has been hampered by the inventory charges incurred by the company on account of the restrictions on its chip sales to China.

However, that shouldn't be a problem next year, as the U.S. government is reportedly going to allow AMD to sell into that market after taking a 15% share of the company's Chinese revenue. As such, don't be surprised to see AMD's earnings indeed hitting Wall Street's expectations in 2026. If that's indeed the case and AMD trades at 33 times earnings at the end of 2026 (in line with the tech-laden Nasdaq-100 index), its stock price could jump to $199.

That points toward potential gains of 23% from current levels, indicating that this AI stock can deliver more upside to investors next year following the impressive gains that it has already clocked in 2025.

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Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.