Advanced Micro Devices (AMD) exceeded Q3 sales and profit expectations, raising guidance. Despite strong data center growth, AMD’s stock continues to fall, sparking concerns about its valuation surpassing Nvidia’s. Revenue hit $9.2 billion, up 36% YoY, with adjusted earnings of $1.20 per share, prompting a 9% stock decline post-earnings.
AMD’s data center segment saw record revenue of $4.3 billion, a 22% increase YoY, driven by Instinct MI350 GPUs and EPYC processors. The client segment revenue surged 46% to $2.8 billion, with gaming revenue up 181% to $1.3 billion. Operating income remains inconsistent across segments amid cost management questions.
AMD signed a lucrative deal with OpenAI, but the stock’s decline post-earnings raises valuation concerns despite positive analyst sentiment. With the stock trading at 112x trailing earnings and 35x estimates, investors are cautious. Long-term potential from the OpenAI deal offsets near-term risks, making AMD a buy for AI and PC recovery believers.
Investors are advised to consider AMD stock for long-term gains in AI and PC recovery, but caution is advised due to short-term volatility and competition from Nvidia. The stock’s decline post-earnings and the current valuation compared to Nvidia’s more attractive metrics warrant a strategic entry point for conservative investors.

Read more at Yahoo Finance: AMD Keeps Falling After Beat-and-Raise Q3. Should You Buy?