Key Takeaways:
- AMD’s MI350 AI accelerator will significantly expand its addressable market, with a 35x performance improvement over MI300X.
- AMD is gaining server CPU market share for the seventh straight quarter, powered by its EPYC processors.
- Despite macro headwinds, AMD’s client business is thriving with a 68% year-over-year revenue growth and record ASPs.
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Advanced Micro Devices (AMD) has quietly transformed into a comprehensive high-performance computing powerhouse.
Under CEO Lisa Su’s leadership, AMD has rapidly expanded its data center presence, gained significant market share in client processors, and established itself as a credible competitor in the booming AI accelerator space.
Looking at the AMD stock price today, many investors might wonder if now is a good time to invest in the stock despite recent market volatility.
After a substantial 36% year-over-year revenue growth in Q1 2025, AMD’s strategic positioning across multiple growth markets makes it one of the most compelling semiconductor investments today.
Let’s examine three key reasons why AMD stock could deliver substantial returns for investors who can look beyond short-term volatility in the AMD stock price.
1. AI Accelerator Growth Poised for Expansion with MI350
AMD’s Data Center GPU business is expanding rapidly as it prepares to launch its next-generation MI350 Series AI accelerators mid-year 2025.
This development could positively impact the AMD stock forecast as analysts adjust their revenue projections to account for this new product line.
The MI350 represents a giant leap forward with 1.5x more memory capacity and bandwidth compared to the MI300X, which will enable AMD to support an expanding range of AI workloads.
CEO Lisa Su has emphasized that the MI350 can deliver “up to 35x higher throughput and performance compared to MI300X” for large language model inference. This performance boost is precisely what hyperscalers need as they optimize AI infrastructure costs, and could be a major driver for AMD stock price appreciation in the coming quarters.
AMD already sees strong customer interest, including a multibillion-dollar partnership with Oracle Cloud Infrastructure to deploy a large-scale cluster powered by MI355X accelerators and 5th Gen EPYC processors. This expanding customer base demonstrates AMD’s growing credibility in the AI accelerator space.
Importantly, AMD’s AI strategy extends beyond silicon to include a comprehensive software stack. The chip maker has accelerated its ROCm software release cadence, shifting from quarterly updates to biweekly releases of optimized training and inference containers. These efforts are bearing fruit, with more than 2 million models on Hugging Face now running on AMD hardware out of the box.
AMD’s acquisition of ZT Systems further strengthens its position by adding world-class systems design expertise. This enables the company to provide ready-to-deploy rack-level AI solutions based on industry standards, reducing deployment time for hyperscalers and accelerating time to market.
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2. Server CPU Dominance Continues with EPYC Turin
AMD’s EPYC server processors continue to take market share from Intel, with the Data Center segment growing 57% year-over-year to $3.7 billion in Q1. The semiconductor behemoth has now experienced seven consecutive quarters of strong double-digit growth in enterprise server CPU sales, an impressive achievement in a traditionally slow-moving market.
The launch of 5th Gen EPYC “Turin” processors has further strengthened AMD’s competitive position. More than 30 new cloud instances from major providers, including AWS, Google, and Oracle, launched in Q1, and every major cloud provider is developing additional Turin-based offerings.
The enterprise on-premise market is also expanding rapidly, with more than 150 Turin platforms becoming available from Dell, Cisco, HPE, Lenovo, and Super Micro.
AMD’s expanding enterprise presence is impressive, with EPYC now deployed by all of the top 10 telecom, aerospace, and semiconductor companies, 9 out of the top 10 automotive companies, and 7 out of the top 10 manufacturing companies on the Forbes 2000.
Even more encouraging is AMD’s roadmap visibility. It has begun manufacturing 5th-generation EPYC at TSMC’s new Arizona fab and announced its next-generation EPYC “Venice” processors for TSMC’s 2-nanometer process node.
This strong product pipeline provides AMD with a clear path to continued server market share gains, especially as customers view it as a safe, stable vendor for critical infrastructure.
As these developments materialize, we expect them to positively influence the AMD stock price today and in the coming years.
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3. Client Business Thriving Amid PC Market Recovery
AMD’s Client business delivered exceptional performance in Q1, with revenue growing 68% year-over-year. This growth significantly outpaces the broader PC market recovery and demonstrates AMD’s ability to capture high-value market segments.
AMD achieved record client CPU average selling prices (ASPs) driven by a mix of high-end desktop and mobile Ryzen processors. Desktop channel sell-out increased by more than 50% year-over-year, with AMD’s latest-generation Ryzen processors becoming the CPU of choice for gamers and topping bestseller lists at leading global e-tailers.
In the critical commercial PC segment, Ryzen PRO PC sell-through grew more than 30% year-over-year, driven by new enterprise customer wins and an 80% increase in AMD-powered commercial systems from HP, Lenovo, Dell, and ASUS compared to 2024.
This expansion into commercial PCs represents a growth opportunity, as AMD has historically been underrepresented in this high-margin segment.
AMD’s AI PC strategy is also gaining momentum, with sales of its latest generation AI PC processors increasing by more than 50% quarter-over-quarter. The first notebooks powered by AMD’s new Ryzen AI MAX+ and mainstream Ryzen AI 7 and 5 300 Series processors have launched to positive reviews, positioning AMD competitively in the growing AI PC category.
Management remains confident that AMD can grow client processor revenue well ahead of the market in 2025, led by expanding adoption across desktop, consumer, and commercial notebook markets and a continuing shift toward higher-ASP products.
Why AMD Stock Looks Undervalued Today
Analysts have an average price target of $127 for AMD stock, indicating an upside potential of 24% from current levels.
This AMD stock forecast reflects expectations for both continued revenue growth and margin expansion as the company increases its share of the higher-margin data center market.
The company’s Q1 results demonstrate strong operating leverage. Net income increased 55% year over year, outpacing revenue growth of 36%.
This trend is expected to continue as AMD’s highest-margin businesses become larger contributors to the overall revenue mix, driving the AMD stock price higher in the coming quarters.
AMD stock trades at a forward P/E ratio of approximately 24x, well below its historical 5-year average of 36x and lower than many semiconductor peers.
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Analysts tracking AMD stock expect adjusted earnings to expand from $3.31 per share in 2024 to $6.94 per share in 2027. If AMD stock is priced at 25x forward earnings, it will trade around $174 in early 2027, above the current price of $102.
TIKR Takeaway for AMD Stock
AMD’s strong positioning across multiple high-growth segments makes it one of the most compelling semiconductor investments for 2025 and beyond.
While AMD stock price may face near-term volatility due to macroeconomic factors and trade tensions, its technology leadership, expanding market presence, and clear roadmap suggest the company is well-positioned to continue gaining market share and growing faster than the broader semiconductor market.
This could make AMD stock a compelling long-term investment for those looking to capture growth in the semiconductor space.
Is AMD stock a buy over the next 24 months? Use TIKR to check the stock’s analyst price targets and growth forecasts to see if it is undervalued today.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
