AMD stock is overvalued compared to industry, facing challenges but expanding portfolio, hold AMD stock.
From Nasdaq: 2025-06-13 12:20:00
Advanced Micro Devices (AMD) shares are currently overvalued with a Value Score of D. The stock is trading at a premium with a Price/Sales of 5.63X compared to the industry’s 3.60X. AMD shares have lost 3.9% year-to-date, underperforming the Computer and Technology sector. The underperformance is due to macroeconomic challenges and export controls on certain GPUs to China.
Despite challenges, AMD is expanding its AI reach with new MI350 GPUs and key partners like Meta Platforms, Microsoft, and Oracle. Meta Platforms announced broad deployment of AMD’s Instinct MI300X and expressed interest in the MI350 Series. Microsoft is using AMD Instinct MI300X for AI workloads on Azure. Oracle is building AI clusters with AMD’s infrastructure.
AMD is benefiting from its expanding EPYC portfolio and recent partnership with Nokia for the Nokia Cloud Platform. The EPYC processors will enhance performance for containerized workloads essential for 5G Core and edge applications. AMD completed the acquisition of ZT Systems to tap into the data center AI accelerator market. However, AMD’s Q2 guidance is unimpressive due to export restrictions to China and competition from NVIDIA.
AMD’s earnings estimates for Q2 2025 have trended downward, with a projected decline of 18.84% year-over-year. The Zacks Consensus Estimate for Q2 2025 revenues is $7.41 billion, indicating 27% growth. Despite its expanding portfolio and rich partner base, AMD faces challenges from macroeconomic uncertainties and competition. Investors are advised to hold AMD stock for now, with a Zacks Rank of #3 (Hold).
Read more at Nasdaq: AMD Stock Trades Higher Than Industry at 5.63X P/S: Hold or Fold?