AMD Stock Forecast 2025

Advanced Micro Devices (NASDAQ: AMD) is one of the most prominent chip makers in the world, competing across numerous markets with industry heavyweights like NVIDIA (NASDAQ: NVDA) and Intel (NASDAQ: INTC), among others. The company has executed remarkably well under CEO Dr. Lisa Su, who was named chief executive in late 2014.

The company is one of two primary players in the graphics processing unit (GPU) market, while it has been steadily expanding its market share in PCs and data centers. Additionally, next-generation gaming consoles—Sony’s (NYSE: SONY) PlayStation 5 and Microsoft’s (NASDAQ: MSFT) Xbox Series X—use semi-custom AMD graphics processors.

AMD stock is now trading at around $90, or approximately 37.7 times earnings. On average, Wall Street sees the stock heading higher, with a mean price target of $101.63. The high valuation estimate is $135, with a low price target of just $17.

(NASDAQ:AMD)
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AMD Stock Forecast 2021

AMD delivered stellar performance in 2020, with revenue increasing 45% to $9.76 billion thanks to strength across both core operating segments. 

The Computing and Graphics segment benefited from booming demand for PCs, driven by the shift to remote work and learning catalyzed by the COVID-19 pandemic. Meanwhile, the Enterprise, Embedded, and Semi-Custom segment saw revenue soar due to the launch of the PS5 and Xbox Series X and growing demand for AMD’s EPYC processor, which is designed for data centers.

Segment2020 RevenueYOY Growth
Computing and Graphics$6.43 billion37%
Enterprise, Embedded, and Semi-Custom$3.33 billion65%
Data source: AMD.

Building on that momentum, AMD kicked off 2021 with strong revenue growth of 93% in the first quarter. In fact, the company is executing so well that it boosted its full-year guidance for 2021. AMD is now forecasting revenue growth of 50% for 2021, up from its prior outlook of 37% growth. That would translate into 2021 revenue of $14.64 billion, which is comparable to the consensus estimate of $14.7 billion.

AMD is scheduled to report second quarter results on July 27, so investors will want to see if management updates its full-year guidance.

AMD Stock Forecast 2025

Over the next five years, analysts are modeling for AMD to grow at a compound annual growth rate (CAGR) of 9%. Here are Wall Street’s current expectations for AMD’s top line.

YearRevenueYOY Growth
2021$14.7 billion51%
2022$16.84 billion15%
2023$19.27 billion14%
2024$21.52 billion12%
2025$23.1 billion7%
Data source: S&P Global Market Intelligence.

Adjusted earnings per share (EPS) is also expected to continue marching higher, more than doubling by 2025.

YearAdjusted EPSYOY Growth
2021$2.1768%
2022$2.7125%
2023$3.5130%
2024$4.3524%
2025$4.8912%
Data source: S&P Global Market Intelligence.
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AMD Bull Case

The data center has historically been a strategic stronghold for Intel, but the chip juggernaut has made many missteps over the past decade and its technological progress has stalled. 

That has been a key opening for rivals looking to chip away at Intel’s position in the server market—AMD just enjoyed the biggest market share gain against Intel in servers since 2006, according to Mercury Research.

Those gains, which brought the company’s share to 8.9% in the first quarter, are being driven by demand for the company’s EPYC chips. Cloud computing requires copious amounts of processing power, which is good news for all chip makers as the market expands.

Successfully defending its position in powering gaming consoles going forward will also be crucial. The previous generation PlayStation 4 also leveraged AMD technology, and the company’s place in the latest generation of consoles will sustain sales momentum since console life cycles often last seven to eight years.

AMD Bear Case

While AMD has been performing very well, it could always make costly mistakes and cede shares back to rivals. Intel recently ousted previous CEO Bob Swan (who was criticized for focusing too much on financials instead of technology) and brought back industry veteran Pat Gelsinger as chief executive earlier this year.

This could represent a new era of renewed emphasis on manufacturing and technical capability. 

NVIDIA has long been AMD’s archnemesis in the discrete GPU (dGPU) market, and the competitor is chipping away at AMD. NVIDIA expanded its market share to 81% in the first quarter, according to Jon Peddie Research, leading AMD’s market share to decline from 25% a year ago to 19%.

At the same time, NVIDIA has also been making inroads in the data center market with its ARM-based processors, recently unveiling a new server processor called “Grace” designed specifically for artificial intelligence (AI), machine learning (ML), and high-performance computing (HPC) workloads. 

Competition will be intense across all of AMD’s most important markets, which can erode pricing power or lead to market share losses (or both).

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