Advanced Micro Devices Inc. (AMD) stock rose more than 3% in Monday's premarket trading as investors returned to semiconductor stocks amid stronger market futures and optimism surrounding artificial intelligence demand.

Nasdaq futures gained 0.51%, while S&P 500 futures climbed 0.71%, supporting technology stocks.

The rebound comes after AMD pulled back from its October highs despite strong third-quarter earnings and an upbeat fourth-quarter revenue forecast.

AI Boom Fuels Growth Expectations

AMD recently reported third-quarter revenue of $13.38 billion, up 45% year over year and above Wall Street's $13.09 billion estimate.

Adjusted earnings reached $2.09 per share, beating the $1.95 consensus estimate.

Data center revenue surged 97% to $8.5 billion, accounting for roughly 64% of total sales.

AMD expects fourth-quarter revenue of approximately $17 billion, plus or minus 3%, above analysts' $16.23 billion forecast.

CEO Lisa Su expects growth to accelerate as the company expands production of its Helios AI systems and Venice server processors.

However, AMD forecasts an adjusted gross margin of 55%, down from 56% in the third quarter.

AMD's Growing Advantage Over Intel

In a Nov. 6 report, Counterpoint Research highlighted AMD's growing advantage over Intel Corp. (INTC) in data center revenue.

Counterpoint expects AMD's data center revenue to reach approximately $77 billion in 2027, split almost evenly between server processors and AI hardware.

The research firm also expects AMD's data center business to account for more than 80% of total revenue next year.

Counterpoint noted that AMD's fourth-quarter revenue forecast of $17 billion exceeds Intel's approximately $15.5 billion midpoint forecast.

However, the firm said AMD's advantage comes primarily from AI accelerators rather than traditional server processors.

Analysts Remain Bullish Despite Valuation Concerns

AMD carries a consensus Buy rating and an average analyst price forecast of $640.96.

On Monday, Oppenheimer upgraded AMD to Outperform with a $600 price forecast.

Meanwhile, UBS maintained its Buy rating but lowered its price forecast to $700 on Nov. 4. JPMorgan maintained Neutral while raising its forecast to $575.

AMD trades at approximately 95.9 times earnings, reflecting elevated expectations for future growth.

MarketDash Edge rankings give AMD a Momentum score of 93.27, Growth score of 87.17 and Quality score of 90.64.

However, its Value score of just 5.22 highlights the stock's premium valuation.

AMD Stock Technical Analysis

AMD remains above its 200-day simple moving average of $415.98, supporting its longer-term bullish trend.

However, shares remain below the 20-day average of $527.30 and the 50-day average of $546.81, signaling continued near-term weakness.

The moving average convergence divergence indicator, or MACD, also remains below its signal line, suggesting bearish momentum.

Traders are watching resistance near $491 and support around $463.

AMD Price Action

AMD shares gained 3.15% to $463.18 in Monday's premarket trading, according to market data.