Technology stocks have made a roaring comeback after getting battered in the first quarter of 2026, as evidenced by the recent surge in the Nasdaq Composite index.
The index has shot up 13.7% so far this month. Importantly, Nasdaq stocks could continue to head higher as the year progresses, primarily driven by the strong earnings growth tech stocks are expected to deliver. Artificial intelligence (AI) is poised to become a key growth driver for the Nasdaq this year, as massive infrastructure investments in this space are expected to fuel significant earnings growth for several companies.
Advanced Micro Devices (AMD 2.85%) is one of those AI companies likely to see remarkable revenue and earnings growth in 2026. The stock has already shot up 45% in April, and there is a good chance that it could be one of the best Nasdaq stocks by the end of 2026.
Image source: AMD.
AMD's new graphics cards will supercharge its growth
While AMD has been way behind Nvidia in the AI chip market over the past three years, recent developments suggest that it is finally cutting its teeth in this lucrative space. The chip designer anticipates its data center revenue to grow by more than 60% annually over the next three to five years. That points toward a major improvement over the 32% jump in AMD's data center revenue in 2025 to $16.6 billion.
NASDAQ: AMD
Key Data Points
AMD's upcoming MI450 data center graphics processing unit (GPU) and its rack-scale server solutions will be the key drivers of its data center business in 2026 and beyond. CEO Lisa Su noted on the January earnings call that AMD is in negotiations with several customers for its upcoming GPU and rack-scale solutions, which are poised to hit the market in the second half of 2026.
The company already has lucrative multiyear partnerships with Meta Platforms and OpenAI for its GPU and server processor chips. The potential addition of new customers is likely to give it an additional boost. It is worth noting that AMD management is confident that its MI450 GPUs could outperform Nvidia's latest Vera Rubin chips.
This probably explains the strong interest in the MI450 chips, with Anthropic reportedly becoming another potential AMD customer. As such, don't be surprised to see AMD crushing analysts' earnings expectations in 2026, paving the way for more upside this year.
Strong earnings growth points toward more gains
Analysts are expecting AMD's earnings to grow by 60% in 2026 to $6.70 per share. However, that estimate has been inching higher, as seen in the following chart.
Data by YCharts.
AMD could deliver stronger earnings growth as its data center GPU shipments ramp up and it wins more customers. So, AMD seems well on its way to increasing earnings at a much faster pace than the broader market in 2026, considering that the S&P 500 index's average earnings growth this year is expected to land at 18%.
This potential outperformance is going to be a catalyst for AMD stock for the rest of the year, suggesting that investors should continue holding it, as it can make them significantly richer by the end of 2026.
