Investing.com -- Daiwa Capital Markets has downgraded Advanced Micro Devices to Outperform from Buy, citing the chipmaker's near-150% share price gain over the past 60 days, even as the firm raised its price target to $500 from $250 following a strong first-quarter earnings beat.

Analyst Louis Miscioscia said AMD's first-quarter 2026 results, reported May 5, were "very good," with revenue of $10.3 billion rising 38% year-over-year and beating the Street estimate of $9.9 billion by $361 million.

Gross margins of 55.4% edged above guidance, while second-quarter revenue guidance of $11.2 billion came in $682 million ahead of consensus, implying 46% year-over-year growth.

AMD also upgraded its long-term outlook, doubling its 2030 estimate for the x86 total addressable market to more than $120 billion and raising its compound annual growth rate projection to 35% from 18%.

Management expects to exceed $20 in earnings per share over the next three to five years.

Despite the bullish operational picture, Daiwa said the scale of the recent share price appreciation warrants a more cautious near-term stance.

"Given the appreciation of almost 150% over the past 60 days, near term it could moderate," Miscioscia wrote, adding that the downgrade reflects valuation rather than any change in the firm's positive view on AMD's growth trajectory.

Daiwa raised its 2026 revenue and earnings per share estimates to $49 billion and $7.25, respectively, and its 2027 estimates to $72.7 billion and $12.85. The $500 price target represents 39 times the firm's 2027 earnings per share forecast.