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AMD's AI Journey Rides on Strong Partner Base: What's the Path Ahead?
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Key Takeaways
AMD is gaining from partnerships with Microsoft, Oracle, Google, Dell, HPE, IBM, and more.
More than 100 new AMD-powered cloud instances and 28 Turin platforms were launched in Q2 2025.
AMD expects Q3 2025 revenues of $8.7B at midpoint, up 28% year over year and 13% sequentially.
Advanced Micro Devices (AMD - Free Report) is benefiting from a rich partner base that includes the likes of Microsoft, Oracle (ORCL - Free Report) , 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 - Free Report) and Broadcom (AVGO - Free Report) .
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 Prospects
NVIDIA 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 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 Performance
AMD 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 Valuation
The 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.
Image: Bigstock
AMD's AI Journey Rides on Strong Partner Base: What's the Path Ahead?
Key Takeaways
Advanced Micro Devices (AMD - Free Report) is benefiting from a rich partner base that includes the likes of Microsoft, Oracle (ORCL - Free Report) , 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 - Free Report) and Broadcom (AVGO - Free Report) .
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 Prospects
NVIDIA 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 & Estimates
AMD 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 Performance
AMD 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 Valuation
The 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.