Advanced Micro Devices (AMD) AI Stock Analysis

• Market Cap: $360.50B
• Dividend Yield: N/A
• Average Volume (3M): 45.14M
• Price to Earnings (P/E): 104.2
• Beta (1Y): 2.00
• Revenue Growth: 31.83%
• EPS Growth: 80.45%
• Country: US
• Employees: 28,000
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 1.20
• Shares Outstanding: 1,628,041,500
• 10 Day Avg. Volume: 28,782,827
• 30 Day Avg. Volume: 45,143,209
• PEG Ratio: 1.36
• Price to Book (P/B): 3.52
• Price to Sales (P/S): 7.87
• P/FCF Ratio: 84.33
• Enterprise Value/Market Cap: 0.72
• Enterprise Value/Revenue: 8.07
• Enterprise Value/Gross Profit: 16.71
• Enterprise Value/Ebitda: 42.22
• 1Y Price Target: $284.16
• Price Target Upside: 34.81% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 37
• EPS Forecast (FY): 3.95
• Revenue Forecast (FY): $34.00B

• Rating: 74 Outperform
• Price Target: $248.00 ▲(17.66% Upside)

AMD's overall stock score reflects its strong financial performance and positive earnings call, which highlight robust growth and strategic partnerships. However, the high valuation and mixed technical indicators temper the overall score. The company's strong position in the semiconductor industry and focus on AI and server CPUs provide a solid foundation for future growth, despite some challenges.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective product strategy, enhancing AMD's competitive position and long-term prospects.

Strategic Partnerships

The partnership with OpenAI positions AMD as a key player in AI infrastructure, potentially driving significant future revenue and market share gains.

Cash Generation

Strong cash generation enhances AMD's financial flexibility, allowing for reinvestment in growth initiatives and strengthening its balance sheet.

Negative Factors

Embedded Segment Decline

A decline in the embedded segment could indicate challenges in maintaining market share, potentially impacting AMD's diversified revenue streams.

Challenges with China Shipments

Regulatory uncertainties in China could limit AMD's growth in a key market, affecting future revenue and strategic initiatives.

Gross Margin Pressure

Pressure on gross margins may affect profitability, requiring efficiency improvements to sustain long-term financial health.

Advanced Micro Devices Business Overview & Revenue Model

Company Description

Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom. Its products include x86 microprocessors as an accelerated processing unit, chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services; and server and embedded processors, and semi-custom System-on-Chip (SoC) products, development services, and technology for game consoles. The company provides processors for desktop and notebook personal computers under the AMD Ryzen, AMD Ryzen PRO, Ryzen Threadripper, Ryzen Threadripper PRO, AMD Athlon, AMD Athlon PRO, AMD FX, AMD A-Series, and AMD PRO A-Series processors brands; discrete GPUs for desktop and notebook PCs under the AMD Radeon graphics, AMD Embedded Radeon graphics brands; and professional graphics products under the AMD Radeon Pro and AMD FirePro graphics brands. It also offers Radeon Instinct, Radeon PRO V-series, and AMD Instinct accelerators for servers; chipsets under the AMD trademark; microprocessors for servers under the AMD EPYC; embedded processor solutions under the AMD Athlon, AMD Geode, AMD Ryzen, AMD EPYC, AMD R-Series, and G-Series processors brands; and customer-specific solutions based on AMD CPU, GPU, and multi-media technologies, as well as semi-custom SoC products. It serves original equipment manufacturers, public cloud service providers, original design manufacturers, system integrators, independent distributors, online retailers, and add-in-board manufacturers through its direct sales force, independent distributors, and sales representatives. The company was incorporated in 1969 and is headquartered in Santa Clara, California.

How the Company Makes Money

AMD generates revenue through several key streams. The primary source is the sale of microprocessors and graphics cards, which are utilized in desktops, laptops, and servers. The Computing and Graphics segment contributes significantly to revenue, driven by high demand for Ryzen processors and Radeon graphics cards, especially in gaming and professional workloads. Additionally, AMD's Enterprise segment earns revenue from server processors and custom silicon solutions for major gaming consoles, including partnerships with companies like Microsoft and Sony. Furthermore, AMD benefits from licensing agreements and intellectual property revenues, which also contribute to its financial performance. Recent strategic partnerships and collaborations have enhanced its market presence and revenue potential in high-growth areas such as artificial intelligence and data centers.

Advanced Micro Devices Financial Statement Overview

Summary

AMD demonstrates strong revenue growth and profitability with an 8.2% increase in TTM revenue and a net profit margin of 10.3%. The balance sheet is robust with low leverage, and cash flow metrics show impressive free cash flow growth. However, there is room for improvement in gross margins and operating cash flow conversion.

Income Statement

AMD's income statement shows strong revenue growth with an 8.2% increase in TTM, indicating robust demand in the semiconductor market. The gross profit margin remains healthy at 48.3%, though slightly lower than the previous year. Net profit margin improved to 10.3%, reflecting better cost management and operational efficiency. The EBIT and EBITDA margins are solid, suggesting good profitability. Overall, AMD demonstrates strong growth and profitability, with some room for improvement in gross margins.

Balance Sheet

AMD's balance sheet is very strong, with a low debt-to-equity ratio of 0.025, indicating minimal leverage and financial risk. The return on equity is modest at 5.6%, but the equity ratio is high, showing a solid capital structure. The company's assets are well-funded by equity, providing stability and financial flexibility. Overall, AMD's balance sheet reflects a strong financial position with low leverage and a solid equity base.

Cash Flow

AMD's cash flow statement shows impressive free cash flow growth of 34.8% in TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 0.47, suggesting efficient conversion of earnings into cash. The free cash flow to net income ratio is high at 0.83, highlighting effective cash management. While the cash flow metrics are strong, there is potential for further improvement in operating cash flow conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	32.03B	25.79B	22.68B	23.60B	16.43B	9.76B
Gross Profit	15.46B	12.72B	10.46B	10.60B	7.93B	4.35B
EBITDA	6.12B	5.26B	4.15B	5.53B	4.17B	1.68B
Net Income	3.31B	1.64B	854.00M	1.32B	3.16B	2.49B
Balance Sheet
Total Assets	76.89B	69.23B	67.89B	67.58B	12.42B	8.96B
Cash, Cash Equivalents and Short-Term Investments	7.24B	5.13B	5.77B	5.86B	3.61B	2.29B
Total Debt	3.87B	2.21B	3.00B	2.86B	661.00M	531.00M
Total Liabilities	16.10B	11.66B	11.99B	12.83B	4.92B	3.13B
Stockholders Equity	60.79B	57.57B	55.89B	54.75B	7.50B	5.84B
Cash Flow
Free Cash Flow	5.45B	2.40B	1.12B	3.12B	3.22B	777.00M
Operating Cash Flow	6.41B	3.04B	1.67B	3.56B	3.52B	1.07B
Investing Cash Flow	-5.21B	-1.10B	-1.42B	2.00B	-686.00M	-952.00M
Financing Cash Flow	-274.00M	-2.06B	-1.15B	-3.26B	-1.90B	6.00M

Advanced Micro Devices Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 210.78
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMD, the sentiment is Neutral. The current price of 210.78 is below the 20-day moving average (MA) of 219.34, below the 50-day MA of 230.12, and above the 200-day MA of 155.95, indicating a neutral trend. The MACD of -3.24 indicates Positive momentum. The RSI at 41.81 is Neutral, neither overbought nor oversold. The STOCH value of 49.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AMD.

Advanced Micro Devices Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QCOM	80 Outperform	$190.95B	35.55	23.34%	1.97%	13.66%	-45.40%
MU	77 Outperform	$271.37B	31.77	17.20%	0.19%	48.85%	997.29%
AVGO	76 Outperform	$1.70T	75.46	31.05%	0.58%	23.87%	285.84%
NVDA	76 Outperform	$4.25T	43.35	107.36%	0.02%	65.22%	58.53%
AMD	74 Outperform	$360.50B	104.17	5.32%	―	31.83%	80.45%
INTC	64 Neutral	$180.35B	3,566.98	0.19%	―	-1.49%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Advanced Micro Devices Corporate Events

AMD Reports Record Q3 2025 Financial Results

AMD reported record financial results for the third quarter of 2025, with revenue reaching $9.2 billion, a 36% increase year-over-year, and significant growth in operating income and net income. The company’s strong performance was driven by high demand for its EPYC and Ryzen processors and Instinct AI accelerators, despite no revenue from shipments to China. AMD’s strategic partnerships and product innovations, including collaborations with OpenAI, Oracle, and IBM, are expected to enhance its market positioning and drive future growth in AI and high-performance computing sectors.

AMD Completes Divestiture of ZT Systems Business

On October 27, 2025, AMD announced the completion of its divestiture of the ZT Systems data center infrastructure manufacturing business to Sanmina. This strategic move allows AMD to retain ZT Systems’ design and customer enablement expertise, enhancing its AI systems for cloud customers. The partnership with Sanmina is expected to accelerate the deployment of AMD’s AI solutions, strengthening its position in the data center market and expanding its ecosystem of partners.

AMD Partners with OpenAI for Strategic GPU Deployment

On October 5, 2025, AMD issued a warrant to OpenAI to purchase up to 160 million shares of AMD common stock, contingent upon the purchase of AMD Instinct GPU products. This move is part of a strategic partnership between AMD and OpenAI, aimed at deploying 6 gigawatts of AMD GPUs to power OpenAI’s AI infrastructure. The partnership is expected to generate significant revenue for AMD and enhance its position in the AI industry, while enabling OpenAI to accelerate its AI capabilities.