AMD’s 7.8% Surge: Growth Supports a Cautious Buy

I view AMD’s +7.77% move to $555.22 as broadly supported by earnings momentum, not enough to overturn my valuation discipline. Q3 revenue rose 44.7% year over year and EPS rose 94.7%; the quarter’s $2.090 EPS also beat the $1.945 estimate by 7.4%. Consensus forecasts call for EPS of $8.084 in 2026 and $17.690 in 2027, with estimated P/Es of 68.7x and 31.4x respectively. That growth makes the forward multiple more defensible, but the trailing P/E is still 118.6x, and free cash flow fell 70.9% to $554M. The median target of $650 implies 17.1% upside. I don’t treat one session as a change in trend or evidence of estimate revisions; I’ll initiate a modest position rather than chase aggressively.