Key Stats for AMD Stock
- Past-Week Performance: -9%
- 52-Week Range: $76 to $267
- Valuation Model Target Price: $478
- Implied Upside: 97% over 2.9 years
What Happened to AMD Stock?
Advanced Micro Devices (AMD) fell about 7% in premarket trading late last week, as the company issued a weaker first-quarter revenue forecast despite solid full-year 2025 performance.
Specifically, late on February 3, 2026, AMD forecast first-quarter revenue between about $9.5 billion and $10.1 billion, compared with $10.27 billion in Q4.
CEO Lisa Su reiterated that next-generation AI server demand, including shipments to OpenAI, should accelerate in the second half, with memory supply not limiting production.
However, the market appeared to focus on near-term AI momentum and revenue quality, given China-licensed AI chip sales that contributed $390 million in Q4.
Reuters even noted that excluding those China-bound shipments, AMD’s data center segment would have missed Q4 estimates, reinforcing concerns around customer concentration.
AMD’s late January trading occurred alongside the release of full-year 2025 results showing record revenue of $34.6 billion and sustained margin expansion across both GAAP and non-GAAP measures.
Fourth-quarter revenue reached $10.3 billion, with non-GAAP operating margin rising to 28%, reflecting continued strength in data center CPUs and accelerating AI platform adoption.
Management also disclosed that approximately $390 million of fourth-quarter data center revenue came from China-bound MI308 shipments approved under a U.S. export license.
For the first quarter of 2026, AMD guided revenue to a range of $9.5 billion to $10.1 billion which implies a modest sequential decline but continued year-over-year growth above 30%.
Is AMD Stock Fairly Valued Right Now?
Under the valuation model shown, the stock is modeled using:
- Revenue Growth: 32.9%
- Operating Margins: 25.5%
- Exit P/E Multiple: 33x
Advanced Micro Devices stock appears to be undervalued, conditional on valuation assumptions holding through December 2028 and execution matching modeled expectations.
The assumptions include 32.9% revenue CAGR, operating margins expanding to 25.5%, and a stable 33.0x exit P/E multiple.
The valuation implies a $478 target price with roughly 97% total upside and about 26% annualized returns if assumptions hold.
AMD stock depends on sustained data center growth second-half AI server ramps broader customer diversification and margin leverage across scaled AI and CPU platforms.
Nevertheless, Advanced Micro Devices stock remains sensitive to near-term volatility, customer concentration risk, and AI monetization timing, keeping outcomes dependent on delivery rather than certainty.
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