AMD Stock Analysis: Cramer Defends, Earnings Outlook, and AI Potential in 2026

AMD has experienced significant growth, fueled by the increasing demand for CPUs and GPUs in AI applications. Cramer argues that the demand for CPUs in agentic AI systems will continue to drive the stock higher. However, HSBC's downgrade highlights concerns about AMD's ability to exceed already high expectations, particularly in server CPU growth. Their reliance on TSMC for manufacturing also poses a risk due to limited spare capacity. AMD's competitor, Intel, with its own foundries, may be better positioned to deliver upside surprises. Despite these concerns, AMD's CEO, Lisa Su, remains optimistic, projecting substantial revenue growth from AI, especially with the upcoming launch of the Instinct MI450 GPU. The company's chiplet architecture gives it an advantage in customizing solutions for AI inference, which is expected to become increasingly important. This makes AMD a strong contender in the AI infrastructure market, potentially joining the trillion-dollar club.

HSBC downgraded AMD due to concerns that its stock price already reflects high expectations and its reliance on TSMC for manufacturing.

AMD's chiplet architecture allows it to customize computing solutions for different AI workloads, particularly AI inference, giving it an edge as demand for real-time decision-making grows.

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