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Technology giant Amazon (AMZN) has revealed an investment in Advanced Micro Devices (AMD), purchasing 822,234 shares valued at roughly $84.4 million. This disclosure, made through a recent 13F filing, signals Amazon’s confidence in AMD at a time when the chipmaker is witnessing a solid upswing in its data center and artificial intelligence businesses.
The timing of Amazon’s purchase coincided with AMD’s Q1 earnings announcement. AMD just posted a blowout quarter, with revenue surging 36% year-over-year, a significant jump from the modest 2% growth it saw in the same quarter last year. AMD’s Q1 marks the fourth consecutive quarter of accelerating growth, driven by robust demand across its data center and AI segments and resilience in its core businesses.
With the backing from the tech titan and the semiconductor company firing on all cylinders, should investors buy AMD stock now?
AMD Will Continue to Deliver Solid Growth
AMD is set to deliver solid growth despite an uncertain macroeconomic backdrop and trade restrictions as its Instinct AI Accelerator and improved Ryzen processor mix continue to witness strong demand.
In Q1, AMD’s data center revenue surged 57% to $3.7 billion. This growth reflects rising demand for its Instinct AI accelerators, especially the MI325X, which is rapidly gaining traction among enterprise and cloud customers. As deployments of these accelerators ramped up, the company’s data center AI revenue delivered strong double-digit year-over-year growth, highlighting AMD’s accelerating presence in the AI infrastructure market.
While the company expects softness in data center revenue in the second quarter due to U.S. export restrictions affecting shipments of the MI308 chips to China, AMD still has significant opportunities ahead. The continued adoption of its Instinct accelerators by leading hyperscalers and the addition of several new tier-one cloud and enterprise clients in Q1 offers a solid foundation for future gains.
AMD is also moving quickly to maintain its innovation lead. During the quarter, the company began sampling its next-generation MI350 series with customers. With volume production set to start by mid-year, the broad deployment is expected in the second half of 2025. Moreover, AMD is on track to launch its MI400 series next year. Its solid product pipeline will expand its addressable market and support its growth.
Meanwhile, AMD’s server CPU business is also performing well. The company continued gaining share in this segment, driven by demand for its fourth- and fifth-generation EPYC processors. Major cloud providers increasingly turn to EPYC to power their infrastructure and services, a clear signal of confidence in AMD’s products.
Besides the data center, AMD’s client and gaming segment also delivered solid growth. Revenue in this category rose 28% year-over-year to $2.9 billion. The standout here was client computing, where revenue jumped 68%, supported by a shift toward higher-end Ryzen processors in desktop and mobile markets. This product mix lifted average selling prices and reflects growing consumer and enterprise demand for powerful computing solutions.
As top-line numbers impress, AMD’s profitability is improving. Gross margin expanded for the fifth consecutive quarter, and net income climbed 55%, reflecting an improved mix of high-end products and a growing share of data center sales.
So, Is AMD Stock a Buy?
While AMD’s fundamentals are compelling, there are headwinds to consider. Export restrictions, especially on AI chip shipments to China, are expected to knock $1.5 billion off 2025 revenue. That said, AMD has already accounted for a $700 million reduction in its Q2 outlook and still expects 27% year-over-year revenue growth. This reflects the strength of its product pipeline and the resilience of its business.
Analysts remain cautiously optimistic. AMD stock has a “Moderate Buy” consensus rating from Wall Street, reflecting both confidence in AMD’s long-term trajectory and recognition of the geopolitical and macroeconomic risks ahead.
In summary, Amazon’s vote of confidence and the solid momentum in its AI and core businesses make AMD stock a solid long-term bet. However, the stock could remain volatile in the near term due to macro uncertainty and trade restrictions.
