Advanced Micro Devices AMD at a press conference prior to CES 2025 unveiled new cutting-edge AI PC processors for consumers and businesses. The Ryzen AI Max Series delivers top-tier performance for premium thin laptops, while the AI 300 Series, powered by “Zen 5” architecture, provides expanded options for advanced computing. The AI 200 Series supports everyday productivity.

For business applications, AMD introduced Ryzen PRO versions with enterprise-grade security and management tools, strengthening its position in the AI PC market and offering innovation for next-gen computing and modern enterprises.

In gaming, AMD unveiled new products to enhance desktop, mobile and handheld gaming experience. The Ryzen 9950X3D and 9900X3D desktop processors feature 16 “Zen 5” CPU cores, AMD RDNA 2 graphics and 2nd Gen 3D V-Cache technology, delivering enhanced performance. The Ryzen X3D processors are expected to be available in the first quarter of 2025.

AMD’s latest Ryzen Z2 handheld gaming processor powers AAA titles smoothly, and the Ryzen 9000 mobile processors bring high performance to gaming laptops. These innovations deliver higher clock speeds, cooler performance and exceptional gaming experiences.

Furthermore, AMD announced that its Ryzen AI PRO processors would power the new Dell Technology’s DELL Pro commercial notebooks, desktops and workstations. This marks the first full portfolio of Dell commercial PCs to be powered by these processors.

AMD Stock Underperforms Sector

AMD shares have lost 11.4% over the past year, underperforming the Zacks Computer and Technology sector’s return of 38.1% and the Zacks Computer – Integrated Systems industry’s return of 11.8%.

AMD’s performance has been negatively impacted by weakness in the Embedded segment, which has been facing declining demand, and intense competition from NVIDIA NVDA, putting pressure on AMD’s market share.

One Year Performance

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Can Acquisitions Boost AMD’s AI Prospects in 2025?

AMD has been on an acquisitive spree to strengthen its AI ecosystem and bridge the technological gap with NVIDIA in the race for AI dominance.

The acquisition of ZT Systems, which provides AI infrastructure to large hyperscale computing companies, is noteworthy. ZT Systems will enable AMD to simultaneously design and validate its next-generation AI silicon and systems. The move is expected to speed up the large-scale deployment of data center accelerators, which are critical for AI innovation.

The acquisition of Helsinki-based Silo AI further enhances AMD’s AI development capabilities. Nod.ai and Mipsology are some other notable acquisitions in the recent past.

A Rich Partner Base Bodes Well for AMD

AMD benefits from a strong partner base, with Microsoft, Oracle, DELL, Hewlett Packard HPE, Lenovo, and Supermicro all having the instinct platforms in production.

AMD powers the El Capitan supercomputer with its Instinct MI300A APUs. Housed at Lawrence Livermore National Laboratory and built by HPE, it has become the fastest on the Top 500 list with a 1.742 exaflop High-Performance Linpack score.

Advanced Micro Devices also recently announced a partnership with IBM to offer AMD Instinct MI300X accelerators on IBM Cloud, further advancing HPC and AI capabilities.

AMD’s 2025 Earnings Estimates Trend Downward

The Zacks Consensus Estimate for AMD’s 2025 earnings is currently pegged at $4.88 per share, down 0.61% over the past 30 days, indicating year-over-year growth of 47.58%.

The consensus mark for 2025 revenues is pegged at $32.27 billion, indicating year-over-year growth of 25.77%.

AMD beat the Zacks Consensus Estimate in three of the trailing four quarters, and was in-line in the remaining quarter, the average surprise being 1.86%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

AMD Stock Overvalued

AMD stock is currently overvalued, as the Value Score of D suggests a stretched valuation at this moment.

The stock is trading at a premium with a forward 12-month Price/Sales of 6.49X compared with the industry’s 3.34X.

Price/Sales Ratio (F12M)

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What Should Investors Do With AMD Stock?

AMD’s expanding portfolio and strategic acquisitions are expected to improve its top-line growth. However, its near-term prospects are dull, given the weakness in the Embedded segment and competition from NVIDIA.

Stretched valuation is a concern.

The stock is trading below the 50-day and 200-day moving averages, indicating a bearish trend.

AMD Stock Trading Below 50-Day & 200-Day SMA

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AMD currently has a Zacks Rank #3 (Hold), suggesting that it may be wise for investors to wait for a more favorable entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report

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