Advanced Micro Devices, Inc.'s strong rally doesn't justify its current valuation. Shares surged after a $6 billion buyback announcement, but the timing is odd given ample funds left on the current plan. Recent earnings were strong, with 36% revenue growth and a big Data Center segment boost, but future growth is expected to slow. Valuation now matches Nvidia's, despite AMD's weaker growth outlook; the stock is up over 60% from recent lows.
U.S. equities were edging up at midday, as tech shares lifted the S&P 500 and Nasdaq, while the Dow Jones Industrial Average was near flat.
Advanced Micro Devices (NASDAQ: AMD) stock emerged in mid-April from the stupor it had been in through most of 2024 and at the start of 2025. The last five days of trading have been particularly positive for the semiconductor giant, and, at their press time price of $118.03, AMD shares are up 15.82% within the time frame.
Advanced Micro Devices Inc (NASDAQ:AMD, ETR:AMD) shares were up 5.1% in early trading on Wednesday after the chipmaker unveiled a new $6 billion share repurchase program, expanding its total buyback authorization to about $10 billion. The announcement comes as a number of semiconductor firms seek to return capital to shareholders amid signs of cooling investor enthusiasm for the artificial intelligence boom that has driven up valuations across the sector.
Shares of Advanced Micro Devices Inc (NASDAQ:AMD) are up 7.2% at $120.53 at last glance, after the semiconductor company announced a $6 billion share buyback program.
AMD announces $6 billion buyback; shares climb 8%
AMD was rising on an expanded stock buyback program and prospective sales of chips to Saudi Arabia.
I am upgrading AMD to a BUY due to an attractive valuation and upcoming catalysts such as China trade war de-escalation and a new AI hardware cycle. AMD trails Nvidia in AI chip technology, with data center growth at 39% YoY (Q1) versus Nvidia's 427%, but its focus on memory and bandwidth is promising. AMD doesn't need to match Nvidia's pace; even modest AI inference gains and niche success can drive outsized returns of up to 10X from current share prices.
Qualcomm Inc. NASDAQ: QCOM closed at its highest level in more than a month on Monday night, continuing a solid recovery from its post-earnings dip two weeks ago.
Zacks.com users have recently been watching Advanced Micro (AMD) quite a bit. Thus, it is worth knowing the facts that could determine the stock's prospects.
One analyst says it's now time to go ‘back to fundamentals' on Nvidia's stock
AMD reported strong Q1 results, with YoY gross profit up 46%, despite sequential revenue decline due to seasonality. AI demand, new product launches, and easing China tariffs position AMD for potential outperformance. AMD's valuation at 18x 2026 earnings suggests room for growth, with a potential rally if it clears the $115 resistance.