Ebube Jones
4 min read
In This Article:
Momentum around semiconductor stocks is running high, and Advanced Micro Devices (AMD) is back in the spotlight. This follows a new partnership with HCLTech aimed at speeding up AI and cloud innovation.
Wall Street has taken notice. Just this week, Melius Research upgraded AMD to “Buy” and hiked its price target to $175, citing the company’s strengthening position in AI inferencing and the potential for a sustained rally as new products hit the market. Other analysts have followed suit, pointing to AMD’s narrowing gap with Nvidia (NVDA) and its expanding customer base in high-growth segments like AI and cloud computing.
With AMD stock in the middle of what some are calling a “historic run,” the question on every investor’s mind is clear: After such a meteoric rise, is it too late to jump in — or is the best yet to come?
Advanced Micro Devices (AMD) has built a strong reputation in high-performance and adaptive computing, making CPUs, GPUs, and custom chips that power everything from cloud data centers to gaming consoles and AI systems.
Over the past 52 weeks, shares are down 9%, but since the start of this year, they’ve bounced back and are up more than 18%.
Right now, AMD trades at a forward price-earnings ratio of about 43.7x, much higher than the sector average of 22x, and its trailing P/E is above 47x. These numbers show investors are paying a premium for AMD, but the company’s financial results help explain why.
In the first quarter of 2025, AMD brought in $7.4 billion in revenue, up 36% from last year. This was mostly because of strong demand in the Data Center segment, which grew 57% thanks to solid EPYC CPU and Instinct GPU sales.
The Client segment also did well, with revenue up 68% on the back of the latest Ryzen processors, while the Gaming and Embedded segments had more mixed results. Gross margins stayed healthy at 50% on a GAAP basis and 54% non-GAAP, and net income reached $709 million GAAP, with earnings per share of $0.44.
AMD’s next phase is being shaped by more than just new chips. The company’s partnership with HCLTech is a good example, with both companies working together to speed up digital change for big businesses using advanced AI, digital, and cloud tools.
