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Momentum around semiconductor stocks is running high, and Advanced Micro Devices (AMD) is back in the spotlight. This follows a new partnership with HCLTech aimed at speeding up AI and cloud innovation.
Wall Street has taken notice. Just this week, Melius Research upgraded AMD to “Buy” and hiked its price target to $175, citing the company’s strengthening position in AI inferencing and the potential for a sustained rally as new products hit the market. Other analysts have followed suit, pointing to AMD’s narrowing gap with Nvidia (NVDA) and its expanding customer base in high-growth segments like AI and cloud computing.
With AMD stock in the middle of what some are calling a “historic run,” the question on every investor’s mind is clear: After such a meteoric rise, is it too late to jump in — or is the best yet to come?
AMD’s Latest Financials
Advanced Micro Devices (AMD) has built a strong reputation in high-performance and adaptive computing, making CPUs, GPUs, and custom chips that power everything from cloud data centers to gaming consoles and AI systems.
Over the past 52 weeks, shares are down 9%, but since the start of this year, they’ve bounced back and are up more than 18%.
Right now, AMD trades at a forward price-earnings ratio of about 43.7x, much higher than the sector average of 22x, and its trailing P/E is above 47x. These numbers show investors are paying a premium for AMD, but the company’s financial results help explain why.
In the first quarter of 2025, AMD brought in $7.4 billion in revenue, up 36% from last year. This was mostly because of strong demand in the Data Center segment, which grew 57% thanks to solid EPYC CPU and Instinct GPU sales.
The Client segment also did well, with revenue up 68% on the back of the latest Ryzen processors, while the Gaming and Embedded segments had more mixed results. Gross margins stayed healthy at 50% on a GAAP basis and 54% non-GAAP, and net income reached $709 million GAAP, with earnings per share of $0.44.
What’s Powering AMD’s Next Chapter
AMD’s next phase is being shaped by more than just new chips. The company’s partnership with HCLTech is a good example, with both companies working together to speed up digital change for big businesses using advanced AI, digital, and cloud tools.
At its 2025 Advancing AI event, AMD made its AI goals clear by showing off an open, rack-scale AI system based on industry standards and launching the Instinct MI350 Series accelerators. The company’s plans now reach beyond 2027, showing it wants to stay a leader in AI hardware and software for years to come. The growing ROCm ecosystem and new rack-scale designs show AMD is serious about being a big part of future AI progress.
The deeper partnership with Infobell IT Solutions uses AMD’s Instinct GPUs and EPYC CPUs to deliver AI and high-performance computing products for businesses. This collaboration not only boosts AMD’s credibility in the AI space, but also positions the company to capture more of the growing enterprise AI market, reinforcing AMD’s transition from a pure-play chipmaker to a key enabler of digital transformation, which could be a powerful catalyst for the stock’s next leg higher.
Wall Street’s Take on AMD
For the second quarter of 2025, AMD expects revenue to come in around $7.4 billion, give or take $300 million. Analysts are looking for earnings per share of $0.35, which is down from $0.50 in the same quarter last year.
Melius Research recently upgraded AMD from “Hold” to “Buy” and raised its price target to $175. Analysts point to AMD’s stronger outlook in AI and the rising potential of its GPUs for AI inferencing. Melius believes the upcoming MI400 processor could make a big difference, and the firm sees a lot of excitement building for AMD’s GPU sales from 2026 through 2028, which could help the stock move even higher.
Overall, 42 analysts give AMD a consensus “Moderate Buy” rating, with an average price target of $133.73. This is lower than its current trading price. If AMD reaches the $175 target set by Melius, that would mean a roughly 23% gain from where it is now.
Conclusion
AMD’s historic run is fueled by real momentum in AI and data center growth, but with the stock already trading above most analyst targets, new buyers need to weigh the premium price against the company’s ambitious roadmap. If AMD delivers on its AI promises and upcoming product launches, there’s still room for upside, especially with heavyweights like Melius eyeing $175. Still, at these levels, it’s a bet on execution and continued market excitement. For investors, it’s less about catching up and more about believing AMD’s best chapters are still being written.
