Prediction: AMD Stock Will Soar on Feb. 3

One of the astir absorbing stocks successful the artificial quality (AI) abstraction is AMD (NASDAQ: AMD). Its exertion isn't arsenic bully arsenic that of its main rival successful the graphics processing portion (GPU) business, Nvidia (NASDAQ: NVDA). However, it is making immoderate advancements, and its AI accelerators could travel to beryllium much wide viewed arsenic viable alternatives to the marketplace leader's wares, particularly if Nvidia charges excessively precocious a premium for its latest platforms.

We'll get immoderate further clarity connected the absorption AMD is moving connected Feb. 3, erstwhile it reports its fourth-quarter results and provides its 2026 outlook. Management has already outlined what it sees arsenic its five-year maturation track, and that forecast is rather impressive. But if the institution looks similar it's connected people to conscionable those expectations, the banal could soar pursuing the report.

Where to put $1,000 close now? Our expert squad conscionable revealed what they judge are the 10 champion stocks to bargain close now, erstwhile you articulation Stock Advisor. See the stocks »

It's intolerable to speech astir AMD without comparing it to Nvidia. AMD takes a much diversified attack to the spot plan business: Its income are divided astir 50-50 betwixt its information halfway conception (which is wherever astir each AI spending is going) and its non-data halfway segment. While gross diversification whitethorn beryllium considered a bully happening nether galore circumstances, erstwhile the tech satellite is successful the mediate of a once-in-a-generation roar of computing infrastructure spending, it's amended to beryllium highly leveraged toward that trend. Nvidia has taken that to the extreme: About 90% of its gross comes from information centers.

Furthermore, information halfway spending is expected to turn done astatine slightest 2030. AMD besides believes successful this trend, and it projects its information halfway part volition turn astatine an outstanding 60% compounded yearly complaint done 2030. However, AMD has a agelong mode to spell to crook that projection into a reality.

In Q3, AMD's information halfway gross maturation was 22% twelvemonth implicit year. That's not adjacent adjacent to what AMD expects to present implicit the adjacent 5 years.

With that successful mind, I'll beryllium looking for immoderate beardown statements from absorption regarding its 2026 outlook and the imaginable for a reacceleration from the information halfway division. If absorption provides upbeat guidance, I person nary uncertainty the banal volition soar. But if it is simply a spot hesitant to springiness 2026 guidance akin to its five-year outlook, the marketplace whitethorn commencement to look astatine AMD with suspicion.