Shares of Advanced Micro Devices traded around $554.68 on Friday, giving the chipmaker a market value of roughly $915 billion after a sharp rally this year.

The stock has climbed more than 150% year to date and more than 300% over the past 12 months, according to Barron’s, as investors keep rotating into companies tied to the AI infrastructure buildout.

Goldman Sachs added to that momentum this week, raising its AMD price target to $640 from $450. The call puts Goldman above the broader Wall Street average and frames AMD as one of the clearer beneficiaries of AI compute demand heading into the second half of 2026.

The thesis rests on a simple idea. AI infrastructure buyers are still constrained by supply, not demand, and AMD is now positioned as a second major supplier of high performance chips for hyperscalers that want alternatives to Nvidia.

AMD’s first quarter results gave bulls more to work with. Revenue rose to $10.3 billion, while data center revenue climbed 57% year over year to $5.8 billion. Non GAAP gross margin reached 55%, and free cash flow hit a record $2.6 billion.

The larger catalyst is the company’s expanding AI backlog. AMD and OpenAI announced a 6 gigawatt agreement last year covering multiple generations of Instinct GPUs, with the first 1 gigawatt deployment of MI450 chips expected to begin in the second half of 2026.

Meta has also expanded its AMD partnership. The companies said shipments for the first gigawatt deployment are scheduled to begin in the second half of 2026, using custom AMD Instinct MI450 based GPUs, sixth generation EPYC CPUs and AMD’s Helios rack scale architecture.

That gives AMD something it lacked in earlier AI cycles: multi year visibility from the biggest buyers of compute. For investors, the question is no longer whether AMD has a role in AI infrastructure. It is how much of that demand can turn into revenue, margins and market share before expectations run ahead of execution.

The risks are still clear. Export controls could weigh on chip sales into China. Semiconductor demand remains cyclical. Competition from Nvidia, custom silicon, Arm, Qualcomm and Intel could pressure AMD’s valuation if growth slows after 2027.

William Blair recently warned that AMD’s rally may be nearing a valuation ceiling as the company faces tougher competition in CPUs and GPUs.

Still, the setup has changed. AMD is no longer trading only on PC cycles or server share gains. It is now being valued as an AI infrastructure supplier with signed commitments from OpenAI and Meta, record data center revenue and a product cycle that investors expect to accelerate in the second half of the year.

That is the bar embedded in the stock. To justify targets near Goldman’s $640 call, AMD will need clean MI450 and Helios execution, continued data center growth and enough margin expansion to show that the AI buildout is flowing through to earnings, not just headlines.