AMD Stock Hits $496.50 on AI Chip Demand Surge, May 27

Advanced Micro Devices (AMD) stock rose to $496.50, up 10.4% over the past day, as the chipmaker benefits from surging demand for AI server processors. The company announced a $10 billion investment in Taiwan to expand advanced packaging and manufacturing capacity. Data center revenue hit $5.8 billion, up 57% year-over-year, driven by adoption of AMD’s EPYC processors for AI inference and agentic workloads alongside GPU accelerators.

Taiwan Investment Signals AI Confidence

AMD CEO Lisa Su announced the $10 billion Taiwan investment on May 21, marking the company’s largest commitment to the Taiwan supply chain. The funds target advanced packaging, substrates, and wafer expansion. Su met with TSMC leadership and supply chain partners including Quanta and Wiwynn to coordinate the ecosystem build-out. This investment positions TSMC as AMD’s primary foundry partner for next-generation AI infrastructure.

CPU Demand Accelerates as AI Shifts Compute Needs

Intel’s Q1 results revealed a major shift toward x86 server CPUs for AI workloads. Intel reported data center revenue up 22% year-over-year and non-GAAP earnings of $0.29, well above the $0.01 forecast. CEO Lip-Bu Tan stated that agentic AI workloads are driving increased CPU demand. Analysts expect AMD’s May 5 earnings report to beat the $9.8 billion Q1 guidance, given accelerating hyperscaler spending on CPUs.

Technical Setup Shows Momentum But Overbought Signals

AMD’s RSI stands at 72.72, indicating overbought conditions, while the ADX at 47.57 shows a strong trend. The stock trades near resistance at $346, with further resistance at $368 and $395. Analysts identify a pullback entry zone between $316 and $288 as a better risk-reward setup after earnings. With Meyka rating the stock B+ and 60 of 79 analysts recommending a buy, the data points to continued upside despite near-term consolidation risk.

Valuation Stretched but Growth Justifies Premium

AMD trades at a PE ratio of 152.2x trailing earnings, well above historical averages. The stock has risen 4x over the past 12 months and 2x in 2026 alone. Meyka’s 12-month forecast of $201.23 sits below the current price, suggesting limited upside from current levels. However, free cash flow yield of 1.1% and strong data center momentum support the premium valuation for now.

Final Thoughts

AMD’s $10 billion Taiwan investment and 57% data center revenue growth reflect genuine AI demand tailwinds. However, Meyka’s B+ rating and technical overbought signals suggest caution at $496.50. Investors should wait for pullbacks near $316–$288 for better entry points.

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The content shared by Meyka AI PTY LTD is solely for research and informational purposes.  Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.