The artificial intelligence megatrend is expected to drive stock market narratives and valuations over the next decade. While Nvidia is at the epicentre of the AI market, you can buy several other tech stocks trading at a much cheaper multiple in July 2025.
Valued at a market cap of US$237 billion, Advanced Micro Devices (NASDAQ:AMD) is one such AI stock that should be part of your watchlist right now. The chip stock has returned more than 7,300% to shareholders in the past decade. Despite these market-beating returns, AMD stock is down 31% from all-time highs, allowing you to buy the dip.
Is AMD stock a good buy right now?
In Q1 2025, AMD reported revenue of US$7.4 billion, an increase of 36% year over year. The chip maker’s Data Center segment led growth with 57% year-over-year revenue expansion to US$3.7 billion, driven by continued adoption of EPYC server processors and strong demand for Instinct AI accelerators.
AMD has gained traction among cloud providers, with more than 30 new instances launched from major hyperscalers, including Amazon’s Web Services, Google, and Oracle, during the quarter.
AMD’s client processor business reported revenue of US$2.3 billion, up 68% year over year. The growth was attributed to higher average selling prices driven by increased adoption of high-end Ryzen processors across desktop and mobile segments. Desktop channel sales grew more than 50% year-over-year, with AMD processors topping bestseller lists at major retailers globally.
AMD is positioning itself aggressively for the next phase of AI infrastructure deployment. The chipmaker recently launched its MI350 series accelerators, which deliver 35 times higher throughput compared to previous generation products. Customer interest in the product has been robust, with Oracle announcing plans for large-scale cluster deployments using the new accelerators.
AMD is developing its MI400 series for 2026, designed as rack-scale solutions that integrate GPUs (graphics processing units) and networking components. The semiconductor giant also completed its acquisition of ZT Systems to enhance its capabilities in designing and deploying complex AI infrastructure at scale. AMD plans to divest ZT’s manufacturing operations while retaining the design expertise.
Alternatively, AMD will face near-term headwinds from new export restrictions limiting shipments of certain AI chips to China. The company estimates the export controls will impact revenue by approximately US$1.5 billion for the full year, with most of it occurring in the second and third quarters.
What’s next for the undervalued AI stock?
AMD’s software strategy continues to evolve with accelerated ROCm (Radeon Open Compute) updates moving to biweekly releases. The company has expanded compatibility with more than 2 million models on Hugging Face and achieved day-zero support for major new AI models from Meta, Google, and others.
The semiconductor company expects continued strong performance driven by expanding enterprise adoption of EPYC processors, ramping production of next-generation AI accelerators, and sustained momentum in client computing markets where gaming and commercial segments show particular strength.
Analysts tracking AMD stock forecast revenue to increase from US$25.8 billion in 2024 to US$56.4 billion in 2029. In this period, adjusted earnings are forecast to expand from US$3.31 per share to US$10 per share. If AMD stock is priced at 30 times forward earnings, which is reasonable, it will trade around $300 per share in early 2029, indicating an upside of over 100% from current levels.
