AMD's AI Journey Rides on Strong Partner Base: What's the Path Ahead?

Advanced Micro Devices AMD is benefiting from a rich partner base that includes the likes of Microsoft, Oracle ORCL, Google, DELL, HPE, Lenovo, IBM, Super Micro, among others. This rich and expanding partner base is helping AMD to strengthen its footprint in the AI infrastructure market, where it faces stiff competition from NVIDIA NVDA and Broadcom AVGO.AMD is benefiting from strong demand for EPYC processors that power cloud and enterprise workloads. Emerging AI use cases and rapid adoption of agentic AI are generating demand for general-purpose compute infrastructure. Adoption of EPYC by the largest cloud hyperscalers is increasing significantly. In the second quarter of 2025, more than 100 new AMD-powered cloud instances were launched, including multiple Turin instances from Google and Oracle Cloud. HPE, Dell Technologies, Lenovo and Super Micro launched 28 new Turin platforms in the reported quarter.AMD’s system-level capabilities have strengthened with the launch of the Instinct MI350 series that supports deployments powered by AMD CPUs, GPUs and NICs. Oracle is building a 27,000-plus node AI cluster combining MI355X accelerators, fifth-gen EPYC Turin CPUs and Pollara 400 SmartNICs. AMD has inked a multibillion-dollar collaboration with HUMAIN to build AI infrastructure powered entirely by its CPUs, GPUs and software.AMD and HCLTech are partnering to accelerate enterprise digital transformation worldwide through advanced solutions in AI, digital and cloud. AMD and IBM are exploring how to integrate AMD CPUs, GPUs, and FPGAs with IBM quantum computers to efficiently accelerate a new class of emerging algorithms to develop next-generation computing architectures. Partnerships with KDDI and Nokia have expanded AMD’s footprint in the telecom sector. AMD’s top-line is expected to benefit from a strong portfolio and rich partner base. AMD expects third-quarter 2025 revenues of $8.7 billion (+/-$300 million), reflecting 28% year over year and 13% sequential growth at the mid-point of the revenue range. The Zacks Consensus Estimate for third-quarter 2025 is pegged at $8.72 billion, indicating 27.9% growth from the figure reported in the year-ago quarter.Tough Competition Hurts AMD’s AI ProspectsNVIDIA and Broadcom are major competitors in the semiconductor space. NVDA designs the powerful GPUs that run advanced AI models, while Broadcom plays a key role with networking chips and custom ASICs (Application-Specific Integrated Circuit) that make hyperscale data centers more efficient.NVIDIA is at the center of AI computing, with its products widely used across data centers, gaming and autonomous vehicles. Its newer Hopper 200 and Blackwell GPU platforms are being adopted quickly as customers work to grow their AI infrastructure. Broadcom is benefiting from strong demand for its networking products and custom AI accelerators (XPUs). XPUs are a type of ASICs, which are necessary to train Gen AI models.AMD’s Share Price Performance, Valuation & EstimatesAMD shares have jumped 39.2% year to date, outperforming the broader Zacks Computer and Technology sector’s return of 13.3% and the Zacks Computer Integrated industry’s appreciation of 26.6%.AMD Stock’s PerformanceAMD stock is overvalued, with a forward 12-month price/sales of 7.46X compared with the broader sector’s 6.7X. AMD has a Value Score of F.AMD ValuationThe Zacks Consensus Estimate for third-quarter 2025 earnings is pegged at $1.17 per share, up by 6 cents over the past 30 days, suggesting 21.2% year-over-year growth. Advanced Micro Devices, Inc. Price and Consensus Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote AMD currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Names #1 Semiconductor StockThis under-the-radar company specializes in semiconductor products that titans like NVIDIA don't build. It's uniquely positioned to take advantage of the next growth stage of this market. And it's just beginning to enter the spotlight, which is exactly where you want to be.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $971 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis Report Oracle Corporation (ORCL): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks