TLDR
- AMD stock fell 3.72% on Tuesday after OpenAI missed its own revenue and user growth targets
- OpenAI has an existing agreement with AMD to supply data center components
- AMD is still up ~49% year-to-date despite the pullback
- Q1 earnings are due May 5; Wall Street expects $1.28 EPS and $9.87B revenue
- AMD trades at a forward P/E of 50, raising valuation questions ahead of earnings
AMD posted record Q4 revenue of $10.3 billion, up 34% year over year. Its data center segment hit $5.4 billion in Q4, a 39% year-over-year jump. The company also has multi-year GPU partnerships with both OpenAI and Meta Platforms.
Advanced Micro Devices, Inc., AMD
Then Tuesday happened.
AMD stock dropped 3.72% after reports emerged that OpenAI missed its own internal revenue and user growth estimates. Given that OpenAI is one of AMD’s key data center partners, the news rattled investors already watching AI spending closely.
The broader chip sector felt the pressure too. AMD had surged nearly 25% last week, briefly touching $350 and putting it up around 65% in April alone. That rally was fueled in part by blowout results from Intel and Texas Instruments.
Trading volume on Tuesday came in at roughly 29 million, slightly below the three-month daily average of 32.47 million.
Earnings on Deck
AMD reports Q1 results on May 5 after the bell. Wall Street is looking for adjusted EPS of $1.28 and revenue of $9.87 billion. Management guided for Q1 revenue of around $9.8 billion, implying roughly 32% year-over-year growth.
AMD has beaten estimates in each of the past eight quarters, so another beat is possible. Intel’s Q1 revenue topped consensus by more than $1 billion, which could be a positive read-through for AMD.
CEO Lisa Su said the company is in active talks with customers on multi-year deployments tied to its Helios and MI450 products later in 2026. AMD also has a previously announced 6-gigawatt Instinct GPU deal with OpenAI and a separate 6-gigawatt partnership with Meta.
Valuation Is the Sticking Point
Even with strong fundamentals, AMD’s valuation is hard to ignore. The stock currently trades at a trailing P/E above 123 and a forward P/E of around 50. Those are elevated multiples, even for a company growing at this pace.
Wall Street’s consensus rating sits at Moderate Buy, based on 19 Buy and 8 Hold ratings over the past three months. The average price target is $295.04, which would actually represent a roughly 8% decline from current levels.
The chip sector broadly has run hard over the past month. Valuations across the group are pricing in a sustained, multi-year AI buildout â but semiconductors have always been cyclical.
Any slowdown in hyperscaler spending, or further signs that AI adoption is lagging internal expectations at major players like OpenAI, could weigh on sentiment quickly.
AMD’s most recent closing price was $323.61, still up roughly 49% year-to-date despite Tuesday’s drop.
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