AMD Stock in 2025: A Deep Dive for Investors

Its journey from a struggling chipmaker to a major player in high-performance computing and artificial intelligence (AI) has been remarkable. As AMD prepares to report its Q1 2025 earnings, investors weigh the company’s recent performance and prospects and consider whether now is the right time to buy, sell, or hold.

AMD’s Recent Performance and Financial Health

• Q1 2025 Expectations: Analysts project revenue to rise 30.2% year-over-year to $7.13 billion, with earnings per share (EPS) up 52.1% to $ 0.94, marking AMD’s strongest EPS growth since 2022128.

• Data Center Focus: Over half of AMD’s revenue now comes from its data center segment, which grew 69% year-over-year in Q4 2024. Key customers like Microsoft and Meta are adopting AMD’s MI300X GPUS, and the next-gen MI350 series is expected to drive further growth 14.

• Stock Performance: Despite strong fundamentals, AMD’s share price has dropped 33% in the past year, underperforming the Nasdaq Composite and the broader semiconductor sector. This reflects investor concerns about execution risks and competition, particularly in AI computing1.

Competitive Landscape

AMD faces fierce competition from Nvidia (which still holds 82% of the discrete GPU market) and Intel in data centre CPUs. However, AMD’s market share among hyperscalers for EPYC CPUs has surpassed 50%, and any further gains in AI chips could be a major catalyst for the stock1.

Technical and Valuation Overview

• Valuation: AMD trades at a P/E of 29.1 and an EV/EBITDA of 27.4-higher than the sector average but below Nvidia’s multiples. This premium suggests optimism about AMD’s AI potential, though expectations are more measured than for some peers1.

• Technical Signals: The stock has rebounded from recent lows but remains below key resistance levels. A sustained move above $115–$120 could signal a trend reversal, while failure to break resistance could see the stock retest lower levels1.

Reasons to Buy, Sell, or Hold AMD Stock

Buy

• AMD’s data center and AI products are gaining traction, with major hyperscalers adopting its latest chips.

• Financials are strong, with accelerating growth in revenue and EPS12.

• Valuation remains attractive relative to long-term growth prospects, especially if AI adoption accelerates5.

Sell

• Execution risks remain high, especially if AMD fails to meet ambitious growth targets or loses further ground to Nvidia.

• Export restrictions and tariffs could pressure revenues and margins, particularly in China1.

• Recent share price underperformance and technical weakness suggest caution in the short term.

Hold

• Many analysts remain neutral, awaiting more evidence of sustained AI and data center momentum16.

• Investors may prefer to wait for a clear technical breakout or further clarity on regulatory and competitive risks before making a move.

The Bottom Line

AMD is at a pivotal moment. Its growth in data centers and AI is promising, but the stock faces short-term volatility and stiff competition. For long-term investors, AMD’s innovation and expanding market share offer compelling reasons to stay the course. However, those more risk-averse may want to see stronger evidence of execution before committing further capital.

Keep an eye on AMD’s Q1 2025 results and management’s outlook-these will be crucial in shaping the next move for the stock.

Citations:

1. https://www.ig.com/uk/news-and-trade-ideas/amd-1q-2025-earnings-preview--what-to-expect-250502

2. https://seekingalpha.com/news/4441005-advanced-micro-devices-q1-2025-earnings-preview

3. https://ir.amd.com

4. https://finance.yahoo.com/news/amd-stock-climb-strong-data-151700693.html

5. https://www.youtube.com/watch?v=gXtvmv6b6JI

6. https://www.investors.com/news/technology/amd-stock-buy-now/

7. https://www.nasdaq.com/articles/will-be-catalyst-amd-stock-investors-are-waiting

8. https://ir.amd.com/financial-information/sec-filings/content/0000002488-25-000009/0000002488-25-000009.pdf