AMD Poised for Growth Amidst Competitive Challenges in the AI Market
Advanced Micro Devices (AMD) is seeing positive momentum from the increasing integration of its EPYC processors by major clients such as Alphabet (GOOGL) and Oracle (ORCL). The fifth-generation EPYC processors are now powering Google Cloud’s C4D and H4D virtual machines, as well as Oracle Cloud Infrastructure’s Compute E6 Standard shapes.
Through its embedded EPYC portfolio, AMD delivers high-performance compute capabilities, robust network connectivity, and secure high-performance storage solutions tailored for enterprise and cloud infrastructures. Recently, the company has bolstered its x86 embedded processor lineup with the launch of the fifth-generation EPYC family, designed to enhance data processing for networking, storage, and industrial edge systems.
Can AMD’s Expanding Portfolio Drive Share Recovery?
Will these new offerings and an increasing customer base enable AMD’s stock to bounce back? The company is currently facing intense competition from NVIDIA (NVDA) in the data center and AI chip sectors. The rise in demand for custom AI chips from competitors like Broadcom raises concerns regarding AMD’s market share.
AMD Stock Performance Analysis
Year to date, AMD shares have decreased by 19.9%. This performance falls short of the Zacks Computer and Technology sector’s average decline of 12.6% and the Zacks Computer – Integrated Systems industry drop of 9%. To counteract NVIDIA’s market influence, AMD relies on its extensive fifth-generation EPYC Turin portfolio, alongside older generations and its Instinct accelerators and ROCm software suite. Notably, NVIDIA’s shares have seen a 10.9% decline this year.
AMD’s Data Center revenues represented approximately 50% of its annual total in 2024, with a striking year-over-year growth of 69%, bringing in $3.9 billion. EPYC instances rose by 27% in 2024, surpassing 1,000, as hyperscaler clients—including Amazon Web Services, Alibaba, Google, Microsoft, and Tencent—unveiled over 100 general-purpose AI instances in only the fourth quarter.
Strategic Partnerships and Acquisitions to Enhance AMD’s Outlook
A robust network of partners—including Cisco Systems, IBM, Oracle, Amazon, Alibaba, Alphabet, Microsoft, Meta Platforms, Dell Technologies, and Tencent—has been essential for AMD’s strategic expansion.
Moreover, AMD’s ongoing acquisition strategy is critical for strengthening its AI ecosystem and narrowing the technological gap with NVIDIA in the AI landscape. The recent purchase of Helsinki-based Silo AI has improved AMD’s AI development capabilities, while the acquisition of ZT Systems—known for supplying AI infrastructure to major hyperscale computing firms—facilitates AMD’s ability to both innovate and validate next-generation AI silicon and systems.
Forecast for AMD’s Earnings in 2025 Shows Positive Trends
Currently, the Zacks Consensus Estimate for AMD’s 2025 earnings stands at $4.60 per share, reflecting a modest increase of one cent over the past month, which translates to an anticipated growth rate of 38.97% year-over-year.
Advanced Micro Devices, Inc. Price and Consensus
Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote
The consensus revenue forecast for 2025 is currently $31.72 billion, indicating a year-over-year increase of 23.02%. AMD has exceeded the Zacks Consensus Estimate in the last four quarters, boasting an average surprise of 2.32%.
Find the latest EPS estimates and surprises on Zacks earnings Calendar.
Zacks Rank Overview
As it stands, AMD holds a Zacks Rank #3 (Hold). Interested investors can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
7 Best Stocks for the Coming Month
Recently released: Experts have identified 7 standout stocks from the existing list of 220 Zacks Rank #1 Strong Buys, which they believe are likely to see early price gains.
Since 1988, this full list has outperformed the market more than twofold, with an average gain of +23.9% annually. These carefully selected 7 stocks deserve your immediate attention.
See them now >>
For the latest recommendations from Zacks Investment Research, download the report on the 7 Best Stocks for the Next 30 Days. Click to access this free report.
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis report
NVIDIA Corporation (NVDA) : Free Stock Analysis report
Oracle Corporation (ORCL) : Free Stock Analysis report
Alphabet Inc. (GOOGL) : Free Stock Analysis report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
The views and opinions expressed herein are those of the author and do not necessarily represent those of Nasdaq, Inc.
