Ricardo Pillai
2 min read
In This Article:
We came across a bullish thesis on Advanced Micro Devices, Inc. (AMD) on Substack by StockOpine. In this article, we will summarize the bulls’ thesis on AMD. Advanced Micro Devices, Inc. (AMD)'s share was trading at $114.99 as of May 15th. AMD’s trailing and forward P/E were 83.93 and 28.41 respectively according to Yahoo Finance.
AMD reported strong first-quarter 2025 results, beating analyst expectations with $7.44 billion in revenue—a 36% year-over-year increase—and non-GAAP EPS of $0.96, up 55%. Gross margin improved to 54%, driven by higher Data Center and Ryzen processor sales. The Data Center segment was the primary growth driver, with revenue rising 57% to $3.7 billion, fueled by strong demand for Instinct AI accelerators and the ramp-up of 5th Gen EPYC Turin processors. AI workloads are a major growth driver for AMD, and we explored something similar in the TSS, Inc.’s case.
Despite a slight sequential dip due to prior-year demand spikes, management expects growth to resume in H2 with new MI350 accelerators. EPYC processors saw continued market share gains across cloud and enterprise, with major hyperscalers expanding deployments. AMD also completed the acquisition of ZT Systems to bolster AI rack-level solution offerings. The Client segment grew 68% to $2.3 billion, benefiting from Ryzen CPU strength and rising commercial PC sales. Conversely, Gaming revenue declined 30% due to lower semi-custom SoC sales, though new Radeon GPUs saw strong demand.The Embedded segment showed gradual recovery but declined 3% YoY. Looking ahead, AMD expects Q2 revenue around $7.4 billion, impacted by export restrictions on MI308 GPU shipments to China. Despite this, the company maintains confidence in achieving double-digit full-year revenue growth, supported by product ramp-ups and market share gains.
Advanced Micro Devices, Inc. (AMD) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 96 hedge fund portfolios held AMD at the end of the fourth quarter which was 107 in the previous quarter. While we acknowledge the risk and potential of AMD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.
