By Advanced Micro Devices (AMD) stock rose sharply on Thursday, outperforming the broader semiconductor sector after a bullish call from Wells Fargo, and strong earnings from key manufacturing partner Taiwan Semiconductor Manufacturing Company reinforced confidence in artificial-intelligence-driven chip demand.
AMD shares climbed more than 6% in Thursday trading, buoyed by Wells Fargo’s decision to maintain the chipmaker as one of its top stock picks for 2026.
The stock also benefited from a broad rally in semiconductor names following consensus-beating fourth-quarter earnings from TSMC, which is AMD’s primary contract manufacturer.
TSMC results lift semiconductor sector
The semiconductor sector received a boost after TSMC reported better-than-expected results for the October–December quarter and outlined an aggressive investment plan for the year ahead.
The world’s largest contract chipmaker said net income rose 35% from a year earlier, marking its eighth consecutive quarter of year-on-year profit growth.
Revenue for the quarter climbed 20.5% to exceed NT$1 trillion for the first time.
Looking ahead, TSMC said it expects capital expenditure of between $52 billion and $56 billion this year.
TSMC added that roughly 10% to 20% of its planned spending would be directed toward advanced packaging technology.
That area has become a critical bottleneck for the industry, particularly for customers building complex AI systems that require sophisticated chip integration.
While Nvidia has been one of the most visible beneficiaries of advanced packaging capacity, the investment also supports AMD’s expanding portfolio of data-centre processors and accelerators.
The strong outlook from TSMC helped lift shares across the chip sector, reinforcing optimism that demand remains resilient despite broader market volatility.
Wells Fargo doubles down on AMD stock
Wells Fargo reiterated an Overweight rating on AMD stock and maintained a $345 price target, implying roughly 45% upside from the stock’s recent trading level near $237.60.
Analyst Aaron Rakers cited AMD’s leadership in central processing units and its continued gains in the data-centre graphics processing unit market share as core pillars of the bullish thesis.
He pointed to the company’s Helios systems strategy and AI-focused product roadmap as positioning AMD to benefit from strong data-centre demand through 2026.
Wells Fargo highlighted AMD’s execution in CPUs as well as what it described as strengthening momentum in artificial intelligence workloads.
The firm said AMD’s roadmap is aligned with what it called “insatiable data centre compute demand,” which it expects to persist over the next several years.
While Wells Fargo sees substantial upside, the stock’s valuation reflects elevated expectations.
Analysts noted that AMD’s price-to-earnings multiple of around 116 suggests investors are already pricing in significant long-term growth.
Wells Fargo said earnings per share could exceed $20 by 2029 if AMD continues to execute successfully on its AI and data-center strategy, though it acknowledged that near-term earnings remain well below that level.
RBC takes a more cautious stance on AMD stock
Not all analysts are equally bullish. Earlier this week, RBC Capital Markets initiated coverage on AMD stock with a Sector Perform rating and a $230 price target, closely aligned with the stock’s current trading price of about $223.50.
RBC acknowledged that AMD is making meaningful progress in the AI GPU market, particularly across major hyperscalers.
The firm highlighted AMD’s recent partnership with OpenAI as establishing the company as a credible supplier for gigawatt-scale AI projects.
Management’s confidence in initial 1-gigawatt rollouts was reflected in RBC’s forecasts.
However, the firm cautioned that AMD’s first rack-scale design, Helios, while promising, carries typical execution risks associated with large, complex system deployments.
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