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AMAT vs. AMD: Which Semiconductor Stock Has an Edge Now?
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Key Takeaways
Applied Materials sees strong traction in etch systems and DRAM technologies for AI chips.
AMD's new GPUs and ROCm software stack boost its role as a key AI infrastructure enabler.
AMD's Data Center revenues jumped 14.3% in Q2 2025, driving 42.2% of total sales.
Applied Materials (AMAT - Free Report) and Advanced Micro Devices (AMD - Free Report) operate at the core of the semiconductor ecosystem. While AMD designs these semiconductor chips, Applied Materials functions as a leading supplier of the equipment essential for manufacturing those chips, operating in two different verticals of the semiconductor value chain.
Both AMAT and AMD are heavily invested in the new generation of semiconductor chips that are used to power artificial intelligence. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for Applied Materials
Applied Materials is a global leader in the supply chain of semiconductor fabrication equipment, covering deposition, etching and inspection — key processes in chip manufacturing. The company’s long-term growth prospects remain highly compelling due to its leadership in AI-driven semiconductor technology.
Due to the proliferation of AI and its rapid adoption by enterprises, Applied Materials is experiencing strong traction in its Sym3 Magnum etch system, Cold Field Emission eBeam technology, gate-all-around, backside power delivery, and 3D DRAM technology nodes crucial for developing high-performance processing and memory chips used in AI and HPC workloads.
Applied Materials’ Sym3 Magnum etch system has generated more than $1.2 billion in revenues since its launch in February 2024. Additionally, in the second quarter of fiscal 2025, the management projected AMAT's revenues from DRAM customers to grow more than 40% in fiscal 2025.
However, U.S. government restrictions on selling advanced semiconductor equipment to Chinese manufacturers are hurting Applied Materials’ sales and growth outlook. These factors are strongly reflected in AMAT’s top and bottom-line growth. The Zacks Consensus Estimate for revenues and EPS indicates year-over-year growth of 4.5% and 8.6%, respectively.
Image Source: Zacks Investment Research
The Case for Advanced Micro Devices
Advanced Micro Devices is evolving as a comprehensive enabler of AI infrastructure spanning networking, software, CPUs, GPUs and other accelerators. Its latest introductions include MI350X and MI355X GPUs and ROCm 7.0 open-source AI software stack.
Both Instinct MI350X and MI355X GPUs are based on AMD CDNA-4 architecture, delivering high memory capacity, bandwidth and training throughput. AMD’s software stack, ROCm, runs some of the world’s biggest AI platforms, supporting leading models like LLaMA and DeepSeek.
AMD has also acquired Nod.ai, Mipsology, Silo AI, Lamini and Brium to strengthen its AI software stack with new capabilities. For 2026, AMD expects its AI-related products like MI400 or Helios, upcoming ROCm versions, to grow on the rising demand from hyperscalers, AI-data centers and sovereign adoptions.
The robust traction in AMD’s AI offerings is evident from the rapid growth of its data center segment, which accounts for these products. In the second quarter of 2025, Data Center revenues increased 14.3% year over year to $3.24 billion, accounting for 42.2% of total revenues. The Zacks Consensus Estimate for AMD’s 2025 revenues and earnings are expected to grow 27% and 18.7%, respectively.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of AMAT and AMD
Year to date, shares of Advanced Micro Devices have gained 25.1%, while shares of Applied Materials have remained unchanged.
Image Source: Zacks Investment Research
AMAT and AMD are trading at forward 12-month price-to-sales multiples of 4.46X and 6.63X, respectively. While AMAT trades below its one-year median of 4.76X, AMD trades above its one-year median of 6.34X over the past year.
Image Source: Zacks Investment Research
Conclusion: AMAT vs. AMD
Applied Materials and Advanced Micro Devices are both critical to the future of semiconductors, but AMD stands out as a better stock at this moment. Its leadership as a key enabler of AI infrastructure, spanning networking, software, CPUs, GPUs and other accelerators, has made it crucial for accelerating AI proliferation.
Although AMAT’s positioning as a provider of tools for deposition, etching and inspection is crucial for AI-driven semiconductor technology, the near-term headwinds like the U.S.-China trade war and uncertainty arising for AMAT from these dynamics make it less attractive at present.
These factors make AMD a better choice at present. Additionally, AMD carries a Zacks Rank #3 (Hold) and AMAT has a Zacks Rank #4 (Sell) at present.
Image: Bigstock
AMAT vs. AMD: Which Semiconductor Stock Has an Edge Now?
Key Takeaways
Applied Materials (AMAT - Free Report) and Advanced Micro Devices (AMD - Free Report) operate at the core of the semiconductor ecosystem. While AMD designs these semiconductor chips, Applied Materials functions as a leading supplier of the equipment essential for manufacturing those chips, operating in two different verticals of the semiconductor value chain.
Both AMAT and AMD are heavily invested in the new generation of semiconductor chips that are used to power artificial intelligence. However, from an investment point of view, one stock offers a more favorable outlook than the other right now. Let’s break down their fundamentals, growth prospects, market challenges and valuation to determine which stock offers a more compelling investment case.
The Case for Applied Materials
Applied Materials is a global leader in the supply chain of semiconductor fabrication equipment, covering deposition, etching and inspection — key processes in chip manufacturing. The company’s long-term growth prospects remain highly compelling due to its leadership in AI-driven semiconductor technology.
Due to the proliferation of AI and its rapid adoption by enterprises, Applied Materials is experiencing strong traction in its Sym3 Magnum etch system, Cold Field Emission eBeam technology, gate-all-around, backside power delivery, and 3D DRAM technology nodes crucial for developing high-performance processing and memory chips used in AI and HPC workloads.
Applied Materials’ Sym3 Magnum etch system has generated more than $1.2 billion in revenues since its launch in February 2024. Additionally, in the second quarter of fiscal 2025, the management projected AMAT's revenues from DRAM customers to grow more than 40% in fiscal 2025.
However, U.S. government restrictions on selling advanced semiconductor equipment to Chinese manufacturers are hurting Applied Materials’ sales and growth outlook. These factors are strongly reflected in AMAT’s top and bottom-line growth. The Zacks Consensus Estimate for revenues and EPS indicates year-over-year growth of 4.5% and 8.6%, respectively.
Image Source: Zacks Investment Research
The Case for Advanced Micro Devices
Advanced Micro Devices is evolving as a comprehensive enabler of AI infrastructure spanning networking, software, CPUs, GPUs and other accelerators. Its latest introductions include MI350X and MI355X GPUs and ROCm 7.0 open-source AI software stack.
Both Instinct MI350X and MI355X GPUs are based on AMD CDNA-4 architecture, delivering high memory capacity, bandwidth and training throughput. AMD’s software stack, ROCm, runs some of the world’s biggest AI platforms, supporting leading models like LLaMA and DeepSeek.
AMD has also acquired Nod.ai, Mipsology, Silo AI, Lamini and Brium to strengthen its AI software stack with new capabilities. For 2026, AMD expects its AI-related products like MI400 or Helios, upcoming ROCm versions, to grow on the rising demand from hyperscalers, AI-data centers and sovereign adoptions.
The robust traction in AMD’s AI offerings is evident from the rapid growth of its data center segment, which accounts for these products. In the second quarter of 2025, Data Center revenues increased 14.3% year over year to $3.24 billion, accounting for 42.2% of total revenues. The Zacks Consensus Estimate for AMD’s 2025 revenues and earnings are expected to grow 27% and 18.7%, respectively.
Image Source: Zacks Investment Research
Stock Price Performance and Valuation of AMAT and AMD
Year to date, shares of Advanced Micro Devices have gained 25.1%, while shares of Applied Materials have remained unchanged.
Image Source: Zacks Investment Research
AMAT and AMD are trading at forward 12-month price-to-sales multiples of 4.46X and 6.63X, respectively. While AMAT trades below its one-year median of 4.76X, AMD trades above its one-year median of 6.34X over the past year.
Image Source: Zacks Investment Research
Conclusion: AMAT vs. AMD
Applied Materials and Advanced Micro Devices are both critical to the future of semiconductors, but AMD stands out as a better stock at this moment. Its leadership as a key enabler of AI infrastructure, spanning networking, software, CPUs, GPUs and other accelerators, has made it crucial for accelerating AI proliferation.
Although AMAT’s positioning as a provider of tools for deposition, etching and inspection is crucial for AI-driven semiconductor technology, the near-term headwinds like the U.S.-China trade war and uncertainty arising for AMAT from these dynamics make it less attractive at present.
These factors make AMD a better choice at present. Additionally, AMD carries a Zacks Rank #3 (Hold) and AMAT has a Zacks Rank #4 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.