I’ve been closely monitoring $Advanced Micro Devices(AMD)$ through Q2 2025, and I wanted to share my take on whether it still belongs in my portfolio. From April through late May, AMD’s shares bounced off multi-month lows—rising from roughly $76 in early April to $115 by mid-May—prompting the question: is this simply a dead-cat bounce within a broader downtrend, or the start of a sustainable breakout?
I see AMD’s revenue mix as one of its greatest strengths. Beyond gaming GPUs and desktop CPUs, data center sales soared 57% year-over-year in Q1 2025—helping offset U.S. export headwinds to China. That growth in the data center segment reinforces AMD’s position as more than just a consumer PC play; it’s steadily pivoting toward high-margin, enterprise/AI-driven markets. The MI300 accelerator family and EPYC server processors continue to chip away at market share, particularly as hyperscalers and cloud providers ramp up AI workloads.
AMD Instinct™ MI300 Series Accelerators
I’m also drawn to AMD’s strengthening ties with $NVIDIA(NVDA)$ on strategic AI projects—most notably, their semiconductor supply deal for the Saudi AI startup Humain. Collaborating with NVIDIA on high-end AI initiatives not only validates AMD’s roadmap for next-gen chips (MI308, MI300X) but also gives it runway in the exploding AI-services space. To me, that type of collaboration is rare among competitors and suggests AMD’s IP is mission-critical in mixed-vendor AI stacks.
NVDA Founder Jensen Huang and AMD CEO Lisa Su
Over the past two years, AMD has consistently gained share in both client (Ryzen) and server (EPYC) CPU markets against $Intel(INTC)$, while steadily growing GPU presence against NVIDIA—no small feat given NVIDIA’s dominant lead in accelerated computing. I view AMD’s push into 3nm and 5nm process nodes, plus its in-house chiplet packaging, as indicators that it can remain on the bleeding edge of performance-per-watt. For me, those technology milestones translate directly into sustained pricing power and margin expansion.
AMD Weekly Chart
Since April 2025, AMD’s shares have climbed roughly 50% off their lows. From a purely technical standpoint, the key questions are:
Is AMD still trading inside a downtrend line?
As of late May, AMD’s weekly chart shows it trying to punch above the trendline that began in March 2024. A successful close above $122 would mark a decisive break beyond the 50-day EMA, suggesting momentum could carry it toward $132-134. However, if the stock fails near $116–$118 and rolls over, that would be a classic “bounce within a downtrend,” with potential back-tests of $93 and $78.
What do the momentum indicators say?
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RSI (14-day): AMD’s RSI climbed above 60 in mid-May, peaking close to 70 and then rolling back to ~63 by late May. An RSI in the mid-60s indicates there’s still some room before overbought territory, but overbought conditions are increasing the odds of a short-term consolidation.
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MACD: I noticed MACD lines crossed bullishly in late April after bottoming below zero. The MACD histogram has been positive since early May, suggesting the short-term trend favors the bulls.
In my opinion, I think AMD is tentatively in a turning phase—no longer decisively under the old downtrend, but not yet proven as a breakout. Until it can close above $116 for multiple sessions (or better yet $122 with high volume), I’d view rallies above $115 as chances to reduce exposure or tighten stops. Conversely, if AMD decisively takes out $116–$118 and sustains a move above $120, I’ll reassess my bias to be more aggressive on the long side.
Is the Recent Rise Just a “Sympathy” Move with NVIDIA?
In April and May 2025, NVIDIA’s stock continued its torrid pace—up over 60% year-to-date—driven by record data-center revenue and new AI accelerators (H400, GB200). As NVIDIA rallied from $550 to $900 in Q2, many semiconductor peers—including AMD—participated in a broad “AI halo” rally. But I ask myself: did AMD’s fundamental story justify the move, or was it purely “NVIDIA spillover”?
It’s undeniable that NVIDIA’s market leadership in H100, H200 and now Blackwell chips has driven near-parabolic pricing, lifting sentiment across chip stocks. In mid-May, when NVIDIA made headlines with its $6B quarterly data-center bookings, AMD climbed in sympathy alongside $Micron Technology(MU)$, $Marvell Technology(MRVL)$, and Broadcom.
Yet, correlation doesn’t equal causation—AMD’s Q1 beat (data center up 57%), the $6B buyback expansion, and partnership with NVIDIA on Humain are all fundamental catalysts. To me, that suggests at least part of the rally stands on AMD’s own feet.
While NVIDIA trades at ~50× 2025E P/E, AMD sits closer to ~30× 2025E P/E. I see that valuation gap as a signal: even after a 50% bounce, AMD still trades at a more reasonable multiple versus NVIDIA, indicating investors may be locking in higher-risk GPU upside for a lower price.
If it were purely a sympathy play, I’d expect AMD’s multiple to converge fully with NVIDIA’s. Instead, the multiple spread suggests that while optics helped amplify the move, fundamentals (data center growth, supply partnerships, moderate valuation) mattered here.
In examining late-April and mid-May volume spikes, I noticed AMD’s trading volume expanded—especially on days when broader semiconductor indices gained on NVIDIA news—implying institutional flows chasing the AI theme. But on days when NVIDIA was flat or slightly down, AMD sometimes outperformed, indicating it had independent underlying momentum.
The Relative Strength Index (RSI) also climbed out of an oversold territory (sub-30 in early April) and retested 60–70 zone. That aligns more with a classic “trend reversal” in my view, rather than just fleeting “sympathy spikes”.
Given the points above, here’s how I balance AMD’s investment thesis.
If AMD can continue growing data center revenue by 40–50% in H2 2025, it could reaccelerate enterprise bookings. That alone could justify a re‐rate toward 35× 2025E EPS. Furthermore, if AMD’s next-gen MI300X/MI400X accelerators gain traction—especially in “AI training as a service” deals—AMD could further close the performance gap versus NVIDIA. Another upside is that AMD recently increased its buyback to $10 billion. I see that as management signaling that free cash flow will expand, bolstering EPS and supporting the stock if revenue growth slightly misses
On the other hand, there are risks to investing in AMD we should be aware of. Q1’s potential $800 million hit due to new U.S. Export Restrictions to China could worsen if those restrictions broaden. If China’s export firewall hampers MI308 ramp or EPYC sales, revenue may slip below Street estimates.
Until AMD holds above $116–$118 with volume, the downtrend remains intact. If it fails to break out by late June 2025, I’d anticipate a drop back toward $93. Another risk factor is that NVIDIA still commands ~80% share in high-end data center GPUs. Intel’s new Ponte Vecchio node may also pressure AMD’s pricing. If AMD has to concede ASPs to gain share, gross margins could erode from ~50% toward 45%, limiting FCF.
For transparency, I have built a position in AMD and my views may be biased. I’m keyed into mid-June’s NVIDIA Developer Conference (which could further validate AI spending) and AMD’s Q2 earnings in late July (to check on data center growth vs. export headwinds). Those two events will strongly influence whether AMD can sustain above $120 by Q3.
@MillionaireTiger @Tiger_comments @Daily_Discussion @CaptainTiger @TigerSG
Disclaimer: This is a general analysis and not financial advice. Always conduct your own research before making any investment decisions.
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