AMD maintains momentum with 107% data center growth, though valuation concerns and competition from Nvidia and Broadcom keep the stock's long-term upside potential moderate.
Strong Q2 results and raised data center guidance are offset by valuation concerns and AI slowdown fears.
Dominant AI accelerator supplier with strong growth, but its data center growth slightly lagged AMD's last quarter.
Custom AI accelerator revenue grew over 200% and management guides to massive AI revenue by 2028.
AMD shares closed the week near $512, maintaining stability despite broader sector volatility. While the company's data center revenue surged 107% year-over-year, outperforming Nvidia's growth rate, investors remain focused on margin expansion and the competitive threat from Broadcom's custom silicon. A valuation model suggests a $586 target price, implying a 16.2% upside through 2028.
While Nvidia remains the dominant force with significantly higher total revenue, AMD's data center segment grew 107% year-over-year last quarter, outpacing Nvidia's 92% growth rate.
AMD faces a two-front battle: Nvidia's dominant full-stack platform and Broadcom's rapidly growing custom AI accelerator business, which saw 221% revenue growth last quarter.