Key Highlights
Advanced Micro Devices (AMD) (NASDAQ: AMD) has experienced a significant increase in stock value, rising over 105% in the past year, with a market capitalization of $407 billion. The current valuation stands at approximately 11.8 times expected sales and 36 times expected earnings for the year.
AMD is positioning itself to gain market share in the artificial intelligence (AI) graphics processing unit (GPU) space as tech giants seek alternatives to Nvidia’s processors. In Q3 2025, AMD reported a revenue increase of 36% year-over-year and achieved a gross margin of 52%. These trends suggest potential for upward revisions in sales and earnings outlook as AMD’s infrastructure deals in AI begin to translate into sales.
Key industry partner OpenAI, a major user of Nvidia’s processors, has also signed a significant partnership with AMD, indicating a growing demand for AMD GPUs. This shift in reliance on different hardware could enhance AMD’s earnings as the inference demand for running AI models rises.
