AMD is focusing on AI development, with strong revenue growth in data center segment.

From Nasdaq: 2025-05-16 04:24:00

Advanced Micro Devices (NASDAQ: AMD) is a key player in supplying top chips for various industries, including data centers. The company’s focus on AI development is driving demand for its GPUs. AMD’s latest MI350 series, based on CDNA 4 architecture, is poised to compete with Nvidia’s offerings, with Oracle already placing a large order.

Despite a recent stock dip, AMD is making strides in the AI market. With the upcoming MI400 series, AMD aims to match Nvidia’s performance. The company’s Ryzen AI chips for personal computers have been well-received, with Ryzen AI Max setting new benchmarks for AI processing and battery life, hinting at future growth opportunities.

In Q1 2025, AMD reported $7.4 billion in revenue, with data center and client segments showing strong performance. Data center revenue surged by 57%, driven by AI GPU sales. While the gaming and embedded segments faced challenges, AMD’s focus on AI chip sales bodes well for future growth prospects, with AI revenue accounting for over 81% of total revenue.

AMD stock is trading at an attractive valuation, with a lower P/E ratio compared to Nvidia. Analysts predict a potential surge in EPS for AMD in 2026, making it a compelling investment opportunity. Major tech companies are investing heavily in AI data center infrastructure, with AMD well-positioned to capture a share of this growing market.

Investors considering AMD should weigh the potential for growth in the AI market. While AMD wasn’t among the top 10 stocks recommended by the Motley Fool Stock Advisor team, its competitive positioning in AI technology and attractive valuation make it a stock worth considering for long-term growth potential.



Read more at Nasdaq: Should You Buy Advanced Micro Devices (AMD) Stock After Its 47% Drop?