AMD Is Gunning for Nvidia’s AI Chip Throne. Should You Buy AMD Stock Now?

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Artificial Intelligence Technology – by Wanan Yossingkum via Istock

For the longest time, NVIDIA (NVDA) enjoyed an open runway in the data center and the GPU artificial intelligence market.

But on June 12, Advanced Micro Devices (AMD) explained that the content of staying in the shade was no longer. In a detailed statement, the company presented the upcoming MI400 instinct chain, a new strain of artificial intelligence chips that will be launched next year.

These chips are the essence of a larger vision called Helios, a complete server shelf capable of connecting thousands of chips to one system “across the shelf”. This AMD structure is placed directly with the Blackwell platform from NVIDIA, which connects 72 graphics processing units in one composition.

AMD also drew a line in the sand on the performance of reasoning. Its new chips come with a more high speed memory, which makes it possible to run the huge Amnesty International models on the single graphics processing unit. As the expectation builds, let’s see how high this can take the AMD stock.

Advanced Micro Devices (AMD), based in Santa Clara, California, has made a tremendous presence in the high -performance computer scene with the maximum market of $ 205.6 billion. AMD offers one of the most comprehensive governor in industry for advanced processor technologies.

In the past three months alone, the AMD share has gained 22.5 %, which greatly exceeded the broader S&P 500 index ($ SPX), which increased by 5.4 % in the same period.

Currently, AMD is trading with profits to the front 40.2 times and 8 times its sales. Both standards sit under the historical average for five years. This indicates a possible window for investors looking for exposure to the next wave of computing innovation.

On May 6, advanced advanced devices entered the spotlight on the profits and made a racing offer before Wall Street’s expectations. In the results of the first quarter of 2025, the company recorded revenues of $ 7.4 billion, which represents an increase of 35.9 % over the same quarter of last year and the sacrifice of Wall Street’s expectations of $ 7.1 billion.

Showstopper in this story was the AMD Data Center, which achieved $ 3.7 billion, recording an increase of 57.2 % on an annual basis. Bring the client and play sector $ 2.9 billion. While the gaming unit struggled under pressure, it slipped by 29.8 % to 647 million dollars, the customer’s business increased sharply, increasing 67.7 % to $ 2.3 billion.

The difference between the sectors has not passed without anyone noticing it, yet the gain of gains was strong enough to raise the total total margin of AMD to 50 %, up from 47 % in the previous year. Provide a stronger product mixture and request swelling on the database chips a constant basis for this margin expansion.

On the profit front, the company maintained the victory chain. Net income without the principles of accounting generally jumped by 54.6 % to touch $ 1.6 billion. The modified EPS also increased by 54.8 %, as it fell at $ 0.96 and before the expected analysts expected $ 0.93. In addition, AMD has $ 939 million in cash from operations, while the free cash flow reached a quarter of $ 727 million.

In the second quarter of 2025, the administration expects that revenue will be about $ 7.4 billion, in addition to $ 300 million. This includes revenue expected revenue, $ 700 million, due to a new export license that affects Mi308 shipments to China. However, the center point means 27 % growth during the previous year.

However, analysts expect some softness in the profitability of the Q2 2025, as it offered a 30 % decrease in the arrow’s profitability to $ 0.35. However, the broader image is still encouraging. For the full financial year 2025, the minimum is expected to fade by 20.6 % from the previous year to $ 3.16. Looking forward, the fiscal year is expected to achieve 2026 stronger growth, as the share profitability is expected to increase by 54 % to $ 4.87.

AMD holds his land with a calm condemnation, and he got a “moderate purchase” consensus that reflects strong confidence from the analyst community. Of 42 analysts who follow stocks, 28 “strong purchase”, one supports “moderate purchase”, and 13 recommended “Hold”.

The average target price represents 133.32 dollars, a potential up to 5.5 %. The goal of the high price on the 200 dollar street means that the stocks may gain approximately 60 % of here.

On the date of publication, Aanchal Sugandh did not have positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article are only for media purposes. This article was originally published on Barchart.com

2025-06-21 17:00:00

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