- AMD stock has dropped 53% over the past 12 months, falling below $100 for the first time since October 2023
- Despite record $12.6 billion in data center revenue for 2024, investors are concerned about weak Q1 2025 guidance
- Top investor Quad 7 Capital sees the sharp drop as a buying opportunity
- AMD’s data center business nearly doubled revenue year over year in 2024
- The stock trades at about 21 times forward earnings despite strong growth potential in data centers and autonomous vehicles
AMD stock has taken a beating over the past year. The chip maker has seen its shares plummet 53% over the past 12 months.
The stock recently dropped below the $100 mark. This is the first time it has traded this low since October 2023.
The company reported a record $12.6 billion in data center revenue for 2024. Despite this milestone, investors remain unconvinced about the stock’s near-term prospects.
Market concerns center around AMD’s weaker-than-expected guidance for Q1 2025. Slowing AI investments have also contributed to the negative sentiment.
Geopolitical uncertainty adds another layer of worry for investors. The broader tech sector is feeling pressure from these same global tensions.
Nvidia’s margin squeeze has heightened fears. Investors worry about overall profitability in the AI chip space.
Rare buying opportunity
Not everyone views the current situation negatively. Top investor Quad 7 Capital sees the sharp drop as a rare buying opportunity.
The Nasdaq Composite has entered correction territory. It is now 13% below its recent high, creating potential bargains for patient investors.
AMD offers more than just data center GPUs. The company makes desktop and laptop processors and has been taking market share from Intel for years.
The company also produces gaming chips. Its product line includes chips for embedded applications, such as self-driving cars.
Data center business doubled revenue in 2024
AMD’s growth story remains compelling. Its data center business nearly doubled revenue year over year in 2024.
The PC chip business also saw rapid growth. On the bottom line, AMD’s adjusted EPS grew by 25% in 2024.
The company expects 30% year-over-year revenue growth in the first quarter of 2025. This projection comes despite the challenges in the tech sector.
The data center industry is expected to grow by 140% by 2030. The autonomous vehicle industry is forecast to grow even faster.
AMD stock currently trades at about 21 times forward earnings. This valuation might represent a good entry point for long-term investors.
The tech sector may face continued volatility in the near term. However, AMD’s business fundamentals remain strong for those with a long-term investment horizon.
Stay Ahead of the Market with Benzinga Pro!
Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders:
- Breaking market-moving stories before they hit mainstream media
- Live audio squawk for hands-free market updates
- Advanced stock scanner to spot promising trades
- Expert trade ideas and on-demand support
