AMD reported outstanding Q3 earnings, with revenues of $9.25 billion, up 36% year over year. The company’s data center, client, and gaming segments all performed well, exceeding analysts’ expectations. AMD also secured deals with OpenAI and Oracle to strengthen its AI business, positioning it for future growth. Stakeholders should hold AMD stock for now.

The deals with OpenAI and Oracle are expected to fuel AMD’s long-term growth in the AI segment. OpenAI will acquire about 10% ownership in AMD, while Oracle will deploy 50,000 AMD GPUs in its data centers. These partnerships solidify AMD’s position in the large-scale AI infrastructure market, competing with NVIDIA Corp.

While AMD’s Q3 performance and new partnerships are positive, new investors may find the stock overvalued. With a P/E ratio of 65.15 times forward earnings, compared to the industry’s 33.44, AMD may be vulnerable to a broader market downturn. Currently ranked as a Zacks Rank #3 (Hold), it may not be the ideal time for new investments in AMD.

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