This Unstoppable Artificial Intelligence (AI) Stock Just Hit a New All-Time High. Is It Too Late to Buy?
Prosper Junior Bakiny, The Motley Fool
Tue, July 7, 2026 at 10:50 AM GMT+5:30
5 min read
- AMD
+6.61% - NVDA
+0.37%
There is just no stopping Advanced Micro Devices (NASDAQ: AMD) right now. Shares of the semiconductor specialist have soared by more than 300% over the past 12 months (as of writing) and recently hit a fresh all-time high. For investors worried they may have missed the boat, here’s the good news: There are solid reasons to remain bullish on AMD’s outlook, and the stock may still deliver market-beating returns over the medium term. Here is why
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Accelerating demand
AMD’s financial results have been strong. In the first quarter, the company’s revenue increased by 38% year over year to $10.3 billion. The tech leader’s data center segment grew even faster, posting sales of $5.8 billion, up 57% year over year. On the bottom line, AMD’s adjusted earnings per share climbed 43% year over year to $1.37. The company did all that while slightly improving its gross and operating margins. The business is booming
However, the market is even more excited about what’s coming. AMD could ride the next wave of the artificial intelligence (AI) industry even more than it did the first. While AMD is a notable player in the GPU (Graphics Processing Unit) market, it is far behind the leader in this niche, Nvidia (NASDAQ: NVDA). But AMD has a much larger share of the CPU (Central Processing Unit) market. As the AI industry shifts from training to inference, demand for CPUs will soar
Notably, the rise of agentic AI will be a major tailwind for AMD. AI agents are complex, autonomous systems that can accomplish tasks and work toward goals with limited human involvement. As AMD argues, agentic AI systems require a full stack of CPUs to function properly. As a result, although during the first phase of the AI revolution GPUs were in much higher demand, the CPU-to-GPU ratio will now move closer to 1:1 versus the previous 1:4 or 1:8
This is great news for AMD, as its EPYC processors are among the market leaders. Meanwhile, the company has gained share in the server CPU market in recent quarters. All of this suggests that AMD’s financial results may improve, and it could continue beating the market over the next few years
There are some risks
Although AMD’s prospects look strong, it’s worth considering several potential pitfalls. First, AMD is not the only CPU giant that is looking to tap into the soaring demand. The company’s longtime rival, Intel (NASDAQ: INTC), is doing the same. There is also Nvidia which is launching its Vera CPU, specifically to take on the agentic AI revolution. Nvidia may be a formidable competitor, as the Vera CPU is designed as part of an integrated AI computing platform that includes the Rubin GPU
