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AMD Reports Significant Revenue Growth
Advanced Micro Devices (NASDAQ: AMD) reported a 36% increase in revenue, reaching $9.2 billion for the quarter ending September 27, with earnings jumping 61% to $1.2 billion. CEO Lisa Su projects an annual revenue growth of over 35% in the coming three to five years, particularly driven by strong demand from data centers and AI-related applications.
Notably, AMD’s stock has appreciated approximately 70% this year, outperforming Nvidia’s 33% growth. A recent multi-year agreement with OpenAI includes the deployment of 6 gigawatts of AMD GPUs, hinting at potential long-term contracts and possibly a 10% equity stake in AMD by OpenAI.
Currently, AMD’s stock has a price-to-earnings (P/E) ratio of over 100, but its forward P/E is significantly lower at 33. Analysts consider AMD’s PEG ratio of around 0.5 as indicative of potential undervaluation, suggesting it remains an attractive long-term investment in the AI sector.
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