Advanced Micro Devices

(AI video summary)

This video was created on 6 November 2025 for IG audiences by ausbiz.

NASDAQ code: AMD

AMD shares hit record high on AI demand

Advanced Micro Devices shares reached a record high after forecasting fourth-quarter (Q4) revenue above expectations, driven by strong artificial intelligence (AI) chip demand. The data centre segment grew 22%, and AMD signed a deal with OpenAI to supply AI chips, with an option for OpenAI to acquire up to 10% of AMD.

Despite strong earnings, AMD shares fell 8%. The stock has rallied 56% since October following the OpenAI deal, prompting profit-taking. NVIDIA dominates 90–95% of the high-end GPU market, leaving AMD with limited share.

Valuation concerns compared to Nvidia

AMD is benefiting from AI growth, but its valuation is steep compared to NVIDIA. AMD trades on 60 times earnings versus NVIDIA at 40 times. NVIDIA delivers a 125% return on invested capital and a 60% operating margin, while AMD posts 5% and 10% respectively.

Investment outlook

Analysts note that valuations across the sector are high, with AI hype largely priced in. NVIDIA’s stronger metrics make it more resilient in a market pullback. With US markets posting their best three-year run since the mid-1990s, analysts suggest risk-return is not favourable at current levels.