Advanced Micro Devices (AMD) stock is back in focus after a series of AI focused deals, including a multi year US$60b GPU supply agreement with Meta Platforms and new partnerships around memory, software and data center infrastructure.

Those AI focused partnerships and supply deals sit alongside a share price that has climbed 9.05% over the past month after a brief 90 day pullback of 2.67%. Meanwhile, the 1 year total shareholder return of 153.61% and 3 year total shareholder return of 135.21% point to strong momentum over a longer stretch as investors reassess AMD’s role in data center and AI infrastructure.

If AMD’s recent AI moves have your attention, it can be worth seeing what else is shaping the sector, including 36 AI infrastructure stocks

With AMD posting record data center revenue, securing multi year AI deals, and trading at about a 31% discount to one intrinsic value estimate and 33% below analyst targets, should you view this as potential upside still on the table, or evidence that markets are already pricing in the next leg of growth?

Most Popular Narrative: 27.5% Undervalued

According to one widely followed narrative, AMD’s fair value sits at $300.00 per share, compared with the recent $217.50 close, which puts a spotlight on how its AI and data center story is being valued.

AMD has evolved into a formidable player in AI and enterprise compute, propelled by leadership in CPUs (EPYC) and a growing presence in GPUs (Instinct MI series). With solid revenue and earnings growth, strong analyst upgrades, and a valuation that still looks reasonable compared to peers, AMD is seen as a balanced play on AI infrastructure growth. However, competition is stiff, regulatory risk is real, and Nvidia continues to dominate key workloads. For investors seeking exposure to potential upside in AI inference, data center CPUs, and adaptive compute, AMD is described as a high-upside opportunity, provided they can navigate near-term headwinds and remain well positioned through 2025.

Curious how that $300.00 fair value comes together? The narrative focuses on rapid revenue expansion, sharply improving margins, and earnings power that repositions AMD alongside the largest AI infrastructure players.

Result: Fair Value of $300.00 (UNDERVALUED)

However, this upside story still faces pressure from Nvidia’s GPU lead and ongoing regulatory and export risks that could reshape AMD’s AI and data center opportunity.

Another View: High Growth, High Multiple

That $300.00 fair value comes from a cash flow driven narrative, but the current P/E of 83.1x tells a different story. It sits well above the US Semiconductor industry at 35.8x, the peer average at 68.9x, and even the 60.8x fair ratio that our model suggests the market could move toward. For you, the question is whether this gap feels like upside potential or valuation risk waiting to compress.

Next Steps

If this mix of confidence and caution around AMD resonates, take a close look at the data now and decide where you stand, starting with 4 key rewards and 1 important warning sign

Looking for more investment ideas?

If AMD feels crowded, broaden your watchlist with a few carefully filtered ideas so you are not relying on just one AI focused story.

• Target potential value opportunities by scanning 59 high quality undervalued stocks that combine quality fundamentals with prices that may not fully reflect their financial profile.
• Prioritize resilience by reviewing 68 resilient stocks with low risk scores that score well on financial strength and volatility checks.
• Hunt for lesser known prospects through the screener containing 25 high quality undiscovered gems where solid businesses may still sit off most investors' radar.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.