Shares of Advanced Micro Devices (NASDAQ: AMD) sank on Wednesday after the semiconductor designer's growth forecast didn't measure up to investors' sky-high expectations. By the close of trading, AMD's stock price was down more than 17%. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now, when you join Stock Advisor. See the stocks » Image source: Getty Images. AMD's chips are selling well AMD's fourth-quarter revenue climbed 34% y ...

Company Overview - Advanced Micro Devices, Inc. (AMD) is valued at $422.8 billion and is a leading global semiconductor company based in California, specializing in high-performance computing and graphics chips [1] - AMD's product lines include Ryzen CPUs for consumer PCs, EPYC processors for servers, Radeon GPUs for graphics and gaming, and Instinct accelerators for AI and high-performance computing [1] Stock Performance - AMD shares have significantly outperformed the broader market, gaining 104.6% over the past year compared to the S&P 500 Index's 13.9% increase [2] - Over the past six months, AMD's stock rose by 51%, while the S&P 500 Index increased by 8.8% [2] - AMD has also outperformed the SPDR S&P Semiconductor ETF (XSD), which gained about 32.5% over the past year and 31.6% over the past six months [3] Competitive Landscape - On January 26, AMD shares fell by 3.3% after Microsoft announced its new Maia 200 AI chip, which aims to reduce reliance on external chipmakers, raising concerns about demand for third-party suppliers and competitive pressure in the semiconductor market [4] Earnings Expectations - For FY2025, analysts expect AMD's EPS to grow by 19.5% to $3.13 on a diluted basis [5] - AMD's earnings surprise history is mixed, with the company beating or matching consensus estimates in three of the last four quarters [5] Analyst Ratings - Among 45 analysts covering AMD stock, the consensus rating is a "Strong Buy," consisting of 30 "Strong Buy" ratings, three "Moderate Buys," and 12 "Holds" [5] - On January 27, UBS analyst Timothy Arcuri reaffirmed a "Buy" rating and raised the price target from $300 to $330, indicating strong confidence in AMD's market position and future growth prospects [6]

Core Insights - Intel Corporation (INTC) is focusing on expanding its presence in the artificial intelligence (AI) market through next-generation AI PCs that enhance everyday computing with powerful on-device AI capabilities [1] - The company has launched Panther Lake processors, branded as Intel Core Ultra Series 3, which improve AI performance, graphics, and efficiency using advanced 18A process technology [3] - Intel has secured partnerships with companies like HP, Microsoft, and NVIDIA to enhance AI capabilities and develop future AI infrastructure and PC products [4][8] Product Features - Intel's AI-powered PCs feature powerful processors, including CPUs, GPUs, and dedicated AI engines, enabling fast on-device AI tasks and enhancing productivity, creativity, security, and intelligent assistance [2] - Core Ultra processors accelerate tasks such as writing, creating, editing, and organizing, while also boosting gaming performance and ensuring data security without constant Internet access [2] Competitive Landscape - Intel faces competition from Qualcomm, which has entered the AI PC market with its Snapdragon X chip, and AMD, which is expanding with its Ryzen AI processors and Radeon GPUs [5][6] - Qualcomm's Snapdragon X chip is a 4nm 8-core processor designed for AI-focused PCs, while AMD's offerings provide fast on-device AI and improved performance for work and gaming [5][6] Financial Performance - Intel's shares have surged 147.1% over the past year, significantly outperforming the industry's growth of 33.7% [7] - The company's shares currently trade at a price/book ratio of 1.99, lower than the industry average of 32.17 [9] - Earnings estimates for 2025 have increased by 6.3% to 34 cents per share, while estimates for 2026 have declined by 1.7% to 58 cents [10]

Core Insights - AMD's data center CPUs and GPUs are expected to see significant growth over the next decade, potentially positioning the company as a future $1 trillion chipmaker [1][11] Market Position - AMD is the second-largest producer of x86 CPUs and discrete GPUs, controlling 38.6% of the x86 CPU market while holding only 6% of the discrete GPU market [3][4] - The company has seen its CPU market share increase over the past decade due to Intel's production issues, but it has struggled to gain traction in the discrete GPU market against Nvidia [4] Financial Performance - AMD's revenue is increasingly driven by its data center business, which accounted for 47% of total revenue in the latest quarter, while client and gaming segments contributed 43% [6] - Year-over-year revenue growth for AMD's segments shows data center growth at 122%, client and gaming at (21%), and embedded at (25%) [7] Future Growth Potential - Analysts project AMD's revenue and adjusted earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of 34% and 45% respectively from 2024 to 2027 [9] - If AMD meets these expectations and continues to grow its EPS at a CAGR of 20% over the following nine years, its stock price could rise to approximately $1,548 per share by 2035, leading to a market cap of nearly $2.5 trillion [10] Competitive Landscape - AMD's Instinct GPUs are priced lower than Nvidia's comparable products, attracting significant orders from major AI software companies [8] - While AMD is unlikely to surpass Nvidia as the leading data center GPU maker in the next decade, it is expected to establish a strong niche with its cost-effective AI-oriented products [11]

Core Insights - AMD plans to increase the price of Radeon GPUs by 10% in early 2026 due to rising costs and high demand for computing, particularly driven by AI [1][2] - The semiconductor industry is experiencing a surge in memory prices, with DRAM and GDDR6 costs significantly impacting profitability and pricing strategies for companies like AMD and Nvidia [5][6] Group 1: AMD's Pricing Strategy - AMD's CEO Lisa Su highlighted that the demand for compute resources is unprecedented, with AI demand being described as "insatiable" [1] - The company has faced increased costs for components, particularly DRAM and VRAM, which have led to a necessary price hike for consumers [2][4] - By the end of 2025, DRAM contract prices had increased significantly, contributing to the overall rise in GPU prices [6] Group 2: Market Dynamics - The competition in the semiconductor market is intensifying, with both AMD and Nvidia facing supply chain challenges, particularly in memory production [3][4] - The shift in focus towards AI-class components has resulted in a "memory bull market," affecting the availability and pricing of consumer-grade memory [5] - The next-generation GDDR7 pipeline remains tight, further pressuring current-generation memory prices and impacting retail pricing strategies for 2026 [7]

Core Insights - Advanced Micro Devices (AMD) has become a prominent player in the artificial intelligence (AI) hardware sector, driven by rising demand for AI accelerators and a strong product roadmap [1] - AMD's stock has increased by 77% this year, significantly outperforming the broader market [1] Financial Performance - AMD's market valuation stands at $363.9 billion, with third-quarter revenue reaching $9.2 billion, a 36% year-over-year increase [2] - Adjusted earnings per share rose by 30% to $1.20, and gross margin was reported at 54% [2] Segment Performance - The data center segment experienced a 22% year-over-year revenue increase, totaling $4.3 billion, with record sales of EPYC processors [3] - The client and gaming segment generated a record $4 billion, up 73% year-over-year, with client revenue increasing by 46% to $2.8 billion and gaming revenue soaring by 181% to $1.3 billion [5] Future Prospects - AMD is preparing for the launch of its 2nm Venice processors in 2026, with strong early testing results and significant client interest [4] - A multi-year agreement with OpenAI to install 6 gigawatts of Instinct GPUs, including MI450 accelerators, is expected to generate over $100 billion in revenue [4]

Core Insights - AMD has transformed from a gaming chip manufacturer to a key player in various computing sectors, including AI, data centers, and gaming [2] - The company reported a significant revenue increase of 36% year-over-year to $9.25 billion in Q3 2025, with net income rising 61% to $1.24 billion [3] - AMD's Client and Gaming segment saw a remarkable 73% revenue increase to $4 billion, driven by strong sales of Ryzen processors and Radeon GPUs [4] Financial Performance - AMD's data center segment generated $4.3 billion in revenue, up 22% year-over-year, largely due to demand for its 5th-generation EPYC processors and Instinct MI350 GPUs [3] - The Embedded segment, however, experienced an 8% decline, generating $857 million [4] - As of November 12, 2025, AMD's stock price is approximately $256, reflecting a year-to-date increase of about 112% [6] Market Position and Valuation - AMD currently trades at nearly 79 times its earnings, indicating strong market confidence in its growth potential [7] - The company is now considered one of the three major players in the chip industry, alongside Intel and Nvidia [2] Strategic Partnerships - AMD has formed a significant partnership with OpenAI, which will utilize up to 6 gigawatts of AMD GPUs for its AI infrastructure, marking a historic commitment in AI computing [9] - AMD has also granted OpenAI a warrant for up to 160 million shares, contingent on achieving specific milestones [10] - Additionally, AMD will power two next-generation supercomputers for the U.S. Department of Energy, representing a $1 billion investment project [12][13] Investment Outlook - Wall Street currently rates AMD stock with a consensus "Moderate Buy" rating, highlighting its unique strategy focused on high-performance design and strategic partnerships [14]

Core Insights - Advanced Micro Devices (AMD) is positioning itself as a competitor in the artificial intelligence (AI) chip market, traditionally dominated by Nvidia [1][2] - AMD's recent advancements in data center GPUs, particularly the MI300 series, have shown competitive performance against Nvidia's offerings [8][9] - Despite facing challenges, AMD's growth potential in the AI sector is significant, with analysts projecting substantial revenue and earnings growth in the coming years [18][19] Company Positioning - Nvidia holds a dominant 94% market share in the discrete GPU market, while AMD controls approximately 6% [5] - AMD has historically attempted to compete with Nvidia by offering lower-cost GPUs, but has struggled to maintain this strategy as Nvidia expanded its product range [5][12] - AMD's MI300X GPUs have outperformed Nvidia's older H100 GPUs in benchmarks, providing a cost-effective alternative for companies [8][9] Market Dynamics - AMD's data center revenue growth has shown fluctuations, with year-over-year growth rates of 115% in Q2 2024, declining to 14% by Q2 2025 [11] - The company faces headwinds including export restrictions to China, competition from Nvidia's new H200 chips, and potential cooling sales of its current MI300X chips as new models are anticipated [12][13] Strategic Partnerships - AMD has secured significant AI contracts with Oracle and OpenAI, indicating a shift in preference among major AI companies to diversify away from Nvidia [16] - Oracle plans to deploy 50,000 AMD GPUs, while OpenAI aims to utilize AMD CPUs in its data centers, potentially reducing reliance on Nvidia's ecosystem [16][17] Future Outlook - Analysts forecast AMD's revenue and earnings per share (EPS) to grow at a compound annual growth rate (CAGR) of 30% and 86% respectively from 2024 to 2027 [18] - While AMD may not surpass Nvidia in overall market dominance, there is potential for both companies to coexist and thrive in the evolving AI chip market [19]

Core Insights - Advanced Micro Devices (AMD) is experiencing significant growth in its Gaming segment, with revenues increasing 73.1% year over year to $1.122 billion in Q2 2025, representing 14.6% of total revenues [1][12] - The growth is primarily driven by strong demand for Radeon GPUs and increased semi-custom revenues, as console inventories normalize and customers prepare for the holiday season [2] - AMD has announced collaborations with Microsoft and Sony for next-generation gaming technologies, including a multiyear partnership with Microsoft for custom chips for Xbox devices and Project Amethyst with Sony [3] - The launch of the Radeon 9000 series graphics cards, particularly the Radeon 9600 XT, has significantly improved gaming performance, including enhanced ray tracing capabilities [4] - For Q3 2025, AMD expects Gaming segment revenues to remain flat, with a notable decline in console-related revenues anticipated in Q4 2025 due to seasonal trends [5] Competitive Landscape - AMD faces strong competition in the gaming market from NVIDIA, which leads in the discrete GPU market, and Intel, which is a strong player in both discrete and integrated graphics [6] - NVIDIA reported a 30.7% year-over-year increase in gaming revenues to $3.76 billion in Q1 2026, driven by strong demand for its Blackwell architecture GPUs [7] - Intel is expanding its presence in the gaming market with its Intel Arc graphics family, which offers modern GPU features and has launched the Intel Arc B-Series based on the latest Xe2 GPU architecture [9] Financial Performance - AMD shares have gained 37% year to date, outperforming the broader Zacks Computer & Technology sector's return of 11.8% and the Zacks Computer-Integrated Systems industry's increase of 25.7% [10] - AMD is trading at a forward 12-month Price/Sales ratio of 7.33X, significantly higher than the industry's 3.65X, indicating a premium valuation [13] - The Zacks Consensus Estimate for Q3 2025 earnings is $1.17 per share, reflecting a 5.4% increase over the past 30 days but a 27.17% decrease year over year [15]

Core Insights - Advanced Micro Devices (AMD) reported second-quarter 2025 non-GAAP earnings of 48 cents per share, exceeding the Zacks Consensus Estimate by 2.13%, but down 30.4% year over year [1] - Revenues reached $7.685 billion, surpassing the Zacks Consensus Estimate by 3.74%, marking a 31.7% year-over-year increase and a 3.3% sequential rise, driven by record sales of Ryzen and EPYC processors [1] Financial Performance - Data Center revenues increased 14.3% year over year to $3.240 billion, representing 42.2% of total revenues, although they decreased 11.8% sequentially [3] - Client and Gaming segment revenue was $3.6 billion, up 69% year-over-year, with the Client segment growing 67.5% to $2.499 billion, accounting for 32.5% of total revenues [6] - The Gaming segment's revenues rose 73.1% year over year to $1.122 billion, driven by strong demand for Radeon GPUs and collaborations with Microsoft and Sony [8] Product Developments - AMD expanded its collaboration with Red Hat to enhance AI inference and enterprise application deployment using AMD Instinct GPUs and EPYC CPUs [4] - The company launched the EPYC 4005 Series processors, targeting enterprise-grade performance for growing businesses [5] - New Ryzen Threadripper 9000WX and PRO 9000X Series processors were announced, aimed at high-performance workstation applications [7] Margin and Expenses - Non-GAAP gross margin contracted by 990 basis points year-over-year to 43.3%, primarily due to an $800 million inventory write-down related to U.S. export controls [11] - Non-GAAP operating expenses increased 32.2% year over year to $2.429 billion, leading to a non-GAAP operating margin of 11.7%, down from 21.7% in the previous year [11] Cash Flow and Shareholder Returns - As of June 28, 2025, AMD had cash and short-term investments of $5.867 billion, down from $7.310 billion in March 2025 [12] - Free cash flow was $1.180 billion in Q2 2025, with a free cash flow margin of 15%, and AMD returned $478 million to shareholders through a share repurchase program [13] Future Guidance - AMD expects third-quarter 2025 revenues of $8.7 billion (+/-$300 million), indicating approximately 28% year-over-year growth and 13% sequential growth [14] - The company anticipates a non-GAAP gross margin of roughly 54% for Q3 2025, with operating expenses expected to be nearly $2.55 billion [14]