AMD (NASDAQ: AMD) has not lived up to investor expectations as an alternative to Nvidia in AI computing. Despite a recent deal with OpenAI, AMD stock is still far from its all-time high, while Nvidia’s stock has seen significant gains. The OpenAI deal caused a 24% surge in AMD stock, but its long-term impact remains uncertain.

AMD’s data center GPUs have not proven to be a competitive alternative to Nvidia’s products, with custom AI accelerator chips from Broadcom gaining traction. Broadcom recently announced a $10 billion sale linked to OpenAI, overshadowing AMD’s deal. Nvidia’s partnership with Intel could further challenge AMD in the AI market.

The recent OpenAI deal is a positive development for AMD, but the stock remains expensive with lower growth rates than Nvidia. Despite the one-time surge, AMD’s stock may not be a wise investment compared to industry leaders like Nvidia and Broadcom. Investors should exercise caution and consider long-term growth potential before investing in AMD.

Before investing in Advanced Micro Devices, consider that the Motley Fool Stock Advisor team did not include it in their top 10 stock picks. The team’s previous recommendations, like Netflix and Nvidia, have delivered significant returns. With Stock Advisor’s strong track record, investors should carefully evaluate their options before buying AMD stock. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, and Nvidia, as well as recommending Broadcom. They also suggest shorting November 2025 $21 puts on Intel. The views expressed in the article are those of the author and not necessarily Nasdaq, Inc.’s. Visit the Fool’s disclosure policy for more information.

Read more at Nasdaq: AMD’s Stock Surged 24% on Its OpenAI Partnership and Is Near an All-Time High. Is It Still a Buy?