AMD Stock Rises on $10 Billion Saudi Deal and Solid Earnings

AMD stock saw a significant rise of over 4% due to a new $10 billion deal in Saudi Arabia and strong Q1 earnings, driving investor optimism. The company is positioned well to benefit from the ongoing AI boom.

Date: 16-05-2025

AI Rating: 8

AMD's Recent Surge
Advanced Micro Devices (AMD) stock has experienced a notable surge of over 4% recently, reflecting a substantial increase of nearly 20% over the past month. This surge can be primarily attributed to two key factors: the announcement of a major $10 billion deal with Humain, a Saudi Arabia-based startup, and strong performance in the company's earnings report.

Impact of New Deal
The new deal with Humain signifies AMD's strategic move into a growing market focused on AI infrastructure and data centers. The partnership establishes AMD as a competitor in the burgeoning lucrative AI sector, which is crucial as traditional players like Nvidia dominate. Customers, particularly those in sovereign AI, increasingly seek diversification from these dominant vendors, providing AMD a pathway to capture market share.

Strong Q1 Performance
AMD's Q1 results posted a remarkable 36% increase in revenue to $7.44 billion, with earnings per share (EPS) at $0.96. This performance was driven by robust demand in data center sales, which grew impressively by 57% to $3.7 billion. As AMD continues to take market share from Intel within the data center sector, the company poses a strong competitive front, propelled further by AI market expansion.

Challenges from U.S.-China Relations
Despite the strong fundamentals, AMD faces hurdles due to U.S. export restrictions impacting its MI308 AI chips, which could result in a substantial revenue drop of $1.5 billion in 2025. However, there are signs of easing tensions between the U.S. and China, offering the potential for these restrictions to be relaxed, which would improve AMD's revenue outlook.

Volatility and Future Outlook
While AMD's stock has displayed considerable volatility in recent years, with notable fluctuations in returns, the recent trends suggest potential stability ahead, especially if it continues to secure deals and expand its market reach. Given the recent wins and easing challenges, AMD appears well-positioned for continued growth in the coming months.

Stocks: AMD