AMD stock dropped 49% but could present a buying opportunity with strong growth prospects

From Nasdaq: 2025-02-10 04:23:00

Despite a 49% decline in Advanced Micro Devices (AMD) stock since March 2024, Nvidia’s stock has increased by about 40%. Nvidia dominates the market for advanced GPUs for data centers, benefiting from a first-mover advantage and adding trillions to its market capitalization.
AMD is catching up to Nvidia in the data center business and leading in another area of the AI semiconductor race. The company’s decline could present a long-term buying opportunity as it launches new, powerful GPUs like the MI350X.
AMD’s revenue in 2024 hit $25.8 billion, with data center revenue soaring 94% to $12.6 billion. The client segment, including Ryzen AI chips, generated $7 billion. Despite declines in gaming and embedded segments, AMD’s AI businesses are key to long-term growth.
After a 7% revenue decline forecast for Q1 2025, AMD stock is attractively priced near its 52-week low. With a P/E ratio of 32.5 and strong growth expected in AI-powered segments, AMD could outperform Wall Street’s estimates.
Investors considering AMD should focus on the company’s AI businesses for long-term growth potential. The AI revolution is still in its early stages, and the 49% dip in AMD stock presents a buying opportunity for a five-year investment strategy.



Read more at Nasdaq: Should You Buy Advanced Micro Devices (AMD) Stock After Its 49% Drop?