AMD Stock: Short Interest Jumps 24% as Fundamentals and Analyst Targets Collide After Sector Rout

The AMD share price clawed back 2.24 percent to €413.60 on Monday, offering a modest reprieve after Friday’s brutal 11 percent single-day plunge. That sell-off had nothing to do with the chipmaker’s own performance – no profit warning, no product delay. Instead, Broadcom triggered the rout by leaving its annual AI revenue forecast unchanged, a move the market read as a signal that the pace of artificial intelligence investment may be cooling.

The resulting wave of uncertainty swept through the entire semiconductor sector, and AMD bore the brunt. Broader concerns about smartphone demand and a deepening memory-market funk only added to the gloom. Yet for a stock that still shows an annualized gain of 117 percent since the start of the year and sits more than 300 percent above its 52-week low of around €100, the sell-off looked more like a tactical setback than a structural reversal.

Short sellers step up their bets

While the market digested the Broadcom jitters, another signal was building quietly in the background. As of May 15, short interest in AMD had jumped nearly 24 percent to 44.7 million shares, up from 36.1 million in the prior reporting period. That spike dwarfed the 1.49 percent increase in overall short interest across Nasdaq-listed stocks over the same window.

Still, the absolute figure remains modest. Short positions represent just 2.75 percent of the float, and the days-to-cover ratio stands at 1.0, meaning bears could close their bets in a single day of normal trading volume. Notably, the short buildup predated the June 5 price crash – it did not cause it – but it does show that some investors had already been hedging or betting against the stock after its powerful rally.

Fundamentals offer a counterweight

The bull case rests on numbers that are hard to ignore. In the first quarter of 2026, AMD posted revenue of $10.3 billion, a 38 percent increase year over year. The data center segment – now more than half of total sales – surged 57 percent to $5.8 billion, powered by EPYC processors and growing Instinct GPU shipments. Adjusted earnings per share climbed to $1.37, up 43 percent, while free cash flow more than tripled to $2.57 billion from $727 million a year earlier.

Should investors sell immediately? Or is it worth buying AMD?

Looking ahead, management expects second-quarter revenue of roughly $11.2 billion, well above the consensus estimate of $10.52 billion. The key catalyst: server CPU revenue alone is forecast to jump more than 70 percent, driven by expanded wafer and backend capacity. That growth is not just about GPUs. As the AI narrative shifts toward agentic workloads, demand for host CPUs, memory bandwidth, and platform integration is rising sharply. AMD’s management sees the total addressable market for server CPUs expanding at over 35 percent annually, reaching $120 billion by 2030.

Analysts double down

The fundamental strength has kept the analyst community firmly in the bull camp. DBS’s Amanda Tan doubled her price target on AMD to $500, citing the partnership with OpenAI as a key confidence booster for the company’s AI roadmap and its battle for market share against Nvidia. TD Cowen’s Joshua Buchalter maintains a “Buy” rating with a $600 target. The consensus among 33 analysts leans heavily toward “Strong Buy,” with an average price target of about $425. The most aggressive call comes from Barclays, which set a target of $665 on June 1.

Goldman Sachs recently upgraded AMD to “Buy” on the back of structural demand trends, arguing that the stock offers meaningful upside over the next twelve months.

Valuation remains the sticking point

Even after Friday’s drop, AMD trades at roughly 102 times adjusted earnings, compared with a sector median of 26. Skeptics argue that leaves virtually no room for disappointment. Management itself has flagged margin pressure on some newer AI products relative to traditional server chips. The central question: can AMD’s AI business grow fast enough to justify the premium?

The stock now sits about 12 percent below the all-time high of €471 reached just five days before the sell-off. For bulls, that gap represents a buying opportunity. For bears, it is a warning that expectations have run too far ahead of reality. The broader debate over the pace of AI investment will likely keep the semiconductor sector on edge for the foreseeable future. AMD’s next quarterly report in August will test whether its momentum can hold – or whether the short sellers have read the tea leaves correctly.