Should You Buy Advanced Micro Devices (AMD) Stock Before Aug. 5?
Advanced Micro Devices (AMD) supplies powerful artificial intelligence (AI) chips for data centers and personal computers.
AMD's data center chips are quickly catching up to Nvidia's chips in terms of performance, which should bode well for its market share.
AMD is scheduled to report its latest quarterly operating results on Aug. 5, which should tell investors more about the company's progress in the AI space.
10 stocks we like better than Advanced Micro Devices ›
The semiconductor industry is at the heart of the artificial intelligence (AI) revolution. Without the thousands of graphics processing units (GPUs) that fill each specialized data center, developing the most advanced AI software applications wouldn't be possible.
Advanced Micro Devices (NASDAQ: AMD) has become a top supplier of GPUs, but it also supplies industry-leading AI chips for personal computers. This could be a major growth area as more AI workloads shift onto devices to create a more convenient user experience.
AMD is scheduled to release its financial results for the second quarter of 2025 (ended June 30) on Aug. 5. Management's forecast points to another strong report, and CEO Lisa Su is likely to give investors a progress update on the company's latest hardware products, including the MI355X and MI400 data center GPUs.
With AMD stock up 30% this year already, should investors buy it ahead of the upcoming report, or is the potential good news already priced in?
AMD is chasing Nvidia in the data center space
Nvidia's (NASDAQ: NVDA) H100 GPU was the hottest data center chip for AI workloads in 2023, earning the company a 98% market share. AMD was late to the party, launching its H100 competitor -- the MI300X GPU -- in December of that year. However, it successfully attracted many of Nvidia's top customers including Oracle, Meta Platforms, and Microsoft.
Nvidia remains a step ahead following the launch of its Blackwell GPU architecture in 2024, and Blackwell Ultra this year. But AMD is closing the gap with its new CDNA (Compute DNA) 4 architecture, which is around 35 times more powerful than its previous generation. It's at the foundation of new GPUs like the MI355X, which just started shipping to customers. Oracle, for instance, has ordered over 130,000 of them.
Nvidia and AMD will up the ante yet again in 2026 with a new series of GPUs. Nvidia plans to launch its Rubin chips, and AMD will release its MI400 Series. Based on what we know so far, the two platforms are likely to deliver similar performance, so it could be the official moment AMD finally catches up to Nvidia from a technological perspective. Su will likely offer a progress update on the MI400 on Aug. 5.
But investors should also keep an eye out for updates on other product platforms outside the data center, like the Ryzen AI 300 series of chips for personal computers. They come with a built-in GPU, central processing unit (CPU), and neural processing unit (NPU) to form industry-leading AI chips, which are already being adopted by top PC manufacturers like Asus, HP Inc., and Dell.
PC chips are gradually becoming powerful enough to run AI workloads locally, which means queries don't have to travel back and forth to external data centers. This creates a faster user experience, and it also means popular AI applications can be run offline without an internet connection, making them more accessible.
AMD's AI revenue likely soared again in Q2
AMD generated $7.4 billion in revenue during the first quarter of 2025 (ended March 31), which was a 36% increase from the year-ago period. That included $3.7 billion in data center revenue, which was up 57% on the back of strong GPU sales, and $2.3 billion in client segment revenue, which was up 68%. The client segment is where the company accounts for sales of its Ryzen AI chips.
AMD's guidance suggests its total revenue came in somewhere between $7.1 billion and $7.7 billion during the second quarter, with the high end of that range representing 32% year-over-year growth. The forecast includes an expected $700 million drop in revenue from the U.S. government's latest restrictions on chip exports to China, so the company's results would otherwise be much stronger.
AMD didn't offer a specific second-quarter forecast for the data center or client segments, but considering they account for a combined 81% of the company's overall revenue, they are likely to continue driving most of its growth. On the other hand, the company's smaller gaming and embedded segments could be a drag on the business yet again.
AMD's gaming business supplies chips for consoles like Sony's Playstation 5 and Microsoft's Xbox, which are suffering a steady decline in sales. The embedded business designs chips for industrial applications and its revenue has declined over the last few quarters, but AMD does expect a return to growth in the second half of this year.
Should you buy AMD stock before Aug. 5?
One quarter is unlikely to change AMD's positive long-term trajectory in the AI hardware space. However, its stock isn't cheap right now following a 30% year-to-date gain, so whether or not investors should buy it ahead of its upcoming earnings report might depend on their time horizon.
Based on AMD's $3.66 in adjusted (non-GAAP) earnings per share (EPS), its stock trades at a price-to-earnings (P/E) ratio of 43.1. Therefore, it's cheaper than Nvidia stock, which trades at a P/E ratio of around 53.7, but Nvidia's business is growing at a much faster pace, which justifies its premium valuation.
That means investors who are looking for significant short-term gains from AMD stock over the next few months might be left disappointed. However, Wall Street's consensus estimate (provided by Yahoo! Finance) suggests AMD's non-GAAP EPS could grow to $5.71 in 2026, placing its stock at a forward P/E ratio of just 27.6. That leaves room for considerable upside, so investors who are willing to hold the stock for the next 18 months could do very well if they buy it today.
But holding AMD stock for an even longer-term period of five years or more will probably produce the best results, because it will give the company ample time to create value from its AI chip sales across the data center and PC markets, thus maximizing potential returns for investors.
In summary, short-term investors probably shouldn't buy AMD stock too aggressively ahead of Aug. 5, but those with a long-term outlook could earn great returns by scooping it up today.
Should you buy stock in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $641,800!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,023,813!*
Now, it's worth noting Stock Advisor's total average return is 1,034% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 21, 2025
Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, HP, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.
Should You Buy Advanced Micro Devices (AMD) Stock Before Aug. 5? was originally published by The Motley Fool
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
10 minutes ago
- Yahoo
UnitedHealth Group (UNH) Responds to the Department of Justice
UnitedHealth Group Incorporated (NYSE:UNH) is one of the top low volatility healthcare stocks to buy now. On July 24, UnitedHealth Group Incorporated (NYSE:UNH) released a statement responding to the Department of Justice after a review of the media reports about investigations into specific aspects of its involvement in the Medicare program. A senior healthcare professional giving advice to a patient in a clinic. UnitedHealth Group Incorporated (NYSE:UNH) stated that it has now begun complying with the formal criminal and civil requests from the Department, and has 'full confidence in its practices and is committed to working cooperatively with the Department throughout this process'. It added that UnitedHealth Group Incorporated (NYSE:UNH) has a historical record of 'responsible conduct and effective compliance,' with independent CMS audits showing that its practices are ranked 'among the most accurate in the industry.' Management stated that after a decade-long civil challenge by the Department to aspects of the company's Medicare Advantage business, 'a court-appointed Special Master concluded there was no evidence to support claims of wrongdoing'. UnitedHealth Group Incorporated (NYSE:UNH) has launched its own initiative to provide confidence and transparency to stakeholders, focusing on conducting 'third-party reviews of policies, practices, and associated processes and performance metrics for risk assessment coding, managed care practices, and pharmacy services.' UnitedHealth Group Incorporated (NYSE:UNH) provides healthcare coverage, data consultancy, and software services. It operates through the OptumRx, OptumInsight, OptumHealth, and UnitedHealthCare segments, which have solid operations. While we acknowledge the potential of UNH as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now. Disclosure: None. This article is originally published at Insider Monkey.
New York Post
11 minutes ago
- New York Post
Stocks surge, euro steady after US-EU trade agreement
Global stocks rose and the euro appreciated on Monday after a trade agreement between the United States and the EU lifted sentiment and provided some clarity in a week of key policy meetings by the Federal Reserve and the Bank of Japan. The US struck a framework trade agreement with the European Union, imposing a 15% import tariff on most EU goods – half the threatened rate, a week after agreeing to a similar trade deal with Japan. Countries are scrambling to finalise trade deals ahead of an August 1 deadline set by US President Donald Trump, with talks between the US and China set for Monday in Stockholm amid expectations of another 90-day extension to the truce between the world's top two economies. 3 President Donald Trump (R) shakes hands with European Commission President Ursula von der Leyen (L) following their meeting, in Turnberry, south west Scotland on July 27, 2025. AFP via Getty Images 'A 15% tariff on European goods, forced purchases of US energy and military equipment and zero tariff retaliation by Europe, that's not negotiation, that's the art of the deal,' said Prashant Newnaha, senior Asia-Pacific rates strategist at TD Securities. 'A big win for the US.' European futures surged more than 1%, while S&P 500 futures rose 0.5% and Nasdaq futures advanced 0.6%. The euro strengthened across the board, rising against the dollar, sterling and yen. 'We have to be a bit cautious from here,' said Sim Moh Siong, currency strategist at Bank of Singapore, of the broader risk-on rally. 'A lot of good news is already in the price.' MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.32%, just shy of the almost four-year high it touched last week. Japan's Nikkei fell 1% after hitting a one-year high last week. While the baseline 15% tariff will still be seen by many in Europe as too high, compared with Europe's initial hopes to secure a zero-for-zero tariff deal, it is better than the threatened 30% rate. 3 Currency traders work near a screen showing the Korea Composite Stock Price Index (KOSPI) and the foreign exchange rate between US dollar and South Korean won, right, at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, Monday, July 28, 2025. AP The US-EU deal provides clarity to companies and averts a bigger trade war between the two allies that account for almost a third of global trade. 'A major tail-risk has now been defused,' said Marc Velan, head of investments at Lucerne Asset Management in Singapore. 'Markets are interpreting this as a sign of stability and predictability returning to trade policy,' he added. 'The China delay fits the same pattern: the administration is opting for controlled diplomacy over confrontation.' 3 The US struck a framework trade agreement with the European Union, imposing a 15% import tariff on most EU goods – half the threatened rate, a week after agreeing to a similar trade deal with Japan. AP Gains for China's blue-chip stocks petered out towards the midday break, while Hong Kong's Hang Seng index gained 0.5%. The Australian dollar , often seen as a proxy for risk appetite, was at $0.657, hovering around the near eight-month peak scaled last week. FED, BOJ AWAIT In an action-packed week, investors will watch out for the monetary policy meetings from the Fed and the BOJ as well as the monthly US employment report and earnings from megacap companies Apple, Microsoft and Amazon. While the Fed and the BOJ are expected to maintain rates, comments from the officials will be crucial for investors to gauge the interest rate path. The trade deal with Japan has opened the door for the BOJ to raise rates again this year. Meanwhile, the Fed is likely to be cautious on any rate cuts as officials seek more data to determine tariffs' impact on inflation before they ease rates further. But tensions between the White House and the central bank over monetary policy have increased, with Trump repeatedly lashing out at Fed Chair Jerome Powell for not cutting rates. Two of the Fed Board's Trump appointees have articulated reasons for supporting a rate cut this month. In commodities, oil prices rose after the US-EU trade agreement. Brent crude futures and US West Texas Intermediate crude both rose 0.5%. Gold prices fell on Monday to their lowest in nearly two weeks on reduced appetite for safe havens.
Entrepreneur
11 minutes ago
- Entrepreneur
Meta Appoints Ex-OpenAI Scientist Shengjia Zhao to Lead New Superintelligence Lab
Zhao, previously a research scientist at OpenAI, played a pivotal role in creating GPT-4 and various lighter models such as version 4.1 and o3. He is among at least eight researchers who have recently transitioned from OpenAI to Meta. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. Meta Platforms has appointed Shengjia Zhao, a leading figure in the development of OpenAI's ChatGPT, as chief scientist of its newly launched Superintelligence Lab. This high-profile move marks a significant step in Meta's accelerating drive to position itself at the forefront of advanced artificial intelligence. CEO Mark Zuckerberg shared the announcement on Friday through Threads. He said Zhao will guide the lab's scientific direction and collaborate closely with both Zuckerberg and Meta's Chief AI Officer Alexandr Wang. Wang joined the company earlier this year after Meta took a substantial stake in his former company, Scale AI. Zhao, previously a research scientist at OpenAI, played a pivotal role in creating GPT-4 and various lighter models such as version 4.1 and o3. He is among at least eight researchers who have recently transitioned from OpenAI to Meta. The influx of talent signals Meta's intent to rapidly close the distance with competitors in the race toward building artificial general intelligence. The creation of the Superintelligence Lab is part of Meta's broader efforts to establish a premier AI research division. The lab is distinct from FAIR, Meta's long-standing AI unit led by deep learning pioneer Yann LeCun. While FAIR has focused on foundational research, the new lab aims to develop what Zuckerberg has described as full general intelligence. Zuckerberg also confirmed that Meta plans to open-source the work produced by the Superintelligence Lab. This strategy has drawn mixed reactions within the AI community, with some praising the transparency and others warning of risks linked to such openness. Meanwhile, Meta's recruitment campaign has unsettled OpenAI. Internal messages leaked this month revealed OpenAI Chief Research Officer Mark Chen comparing Meta's tactics to "someone breaking into our home and stealing something." In response, OpenAI is reportedly reassessing its compensation practices and offering staff additional time off to curb further departures. OpenAI CEO Sam Altman has publicly criticised what he views as profit-driven hiring practices. He alleged that Meta has lured researchers with offers reaching USD 100 million in signing bonuses, a claim dismissed as exaggerated by Meta's Chief Technology Officer Andrew Bosworth. However, reports of even higher offers, including an unverified USD 1.25 billion compensation package over four years, illustrate the escalating competition for elite AI talent. While Altman argues that OpenAI's mission-focused approach offers a stronger long-term foundation, others in the industry see Meta's strategy as justified. Google DeepMind's CEO Demis Hassabis called the hiring surge a rational response given Meta's desire to catch up. With over USD 14 billion invested in AI infrastructure and partnerships, Meta is making its intentions clear. The addition of Zhao and other key hires underscores the company's determination to lead—not just follow—the next wave of AI development.
