AMD Stock Has Doubled This Year. Is It Still a Buy?

Advancved Micro Devices (NASDAQ: AMD) has been 1 of the best-performing artificial quality (AI) stocks successful 2026 truthful far. It has fundamentally doubled successful 2026, but astir each of that tally started successful April. The question is whether AMD tin proceed this tally passim 2026 oregon whether determination are amended options available.

AMD conscionable reported a blowout quarter, which helped boost the stock, but is it afloat valued? Let's instrumentality a look.

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AMD's concern isn't conscionable AI-focused

Unlike its adjacent Nvidia (NASDAQ: NVDA), AMD doesn't get each of its gross from AI-related products. It has a overmuch much balanced business, but if maturation rates proceed trending successful the absorption they are, AMD could go a batch much AI-focused than it is now.

In Q1, its information halfway part saw 57% gross maturation to $5.78 billion. Its different non-AI divisions besides did rather well, with Client & Gaming rising 23% twelvemonth implicit twelvemonth to $3.6 cardinal and Embedded expanding 6% to $873 million.

If AMD's information halfway part continues rising quickly, that volition alteration AMD into a much Nvidia-like company, eliminating the equilibrium that immoderate investors similar with AMD. AMD's semipermanent projections indicated a compounded yearly maturation complaint (CAGR) of 60% for its information halfway division.

In comparison, its different 2 divisions volition acquisition a 10% CAGR implicit the adjacent 5 years. This volition leverage AMD heavy toward AI, completing the translation into an AI-focused business. That could beryllium a bully oregon atrocious thing, depending connected wherever you deliberation AI request volition go.

The marketplace intelligibly loves the absorption successful which AMD's concern is headed, which is wherefore it has done truthful good implicit the past fewer months. However, that run-up comes astatine a price. AMD's banal is nary longer inexpensive by immoderate measure. It trades for 139 times net and 58 times guardant earnings.

This indicates that AMD's net volition skyrocket this year, but adjacent aft a beardown year, the banal volition inactive beryllium precise expensive. Investors request to inquire themselves if this is simply a terms worthy paying, particularly erstwhile Nvidia is increasing astatine a overmuch faster complaint and trades for 27 times guardant earnings.

To me, Nvidia is the acold amended investment, and AMD is lone an alternate that immoderate similar to champion. However, AMD has been the amended banal to ain arsenic of late, truthful the Nvidia superiority appraisal hasn't panned out.