Advanced Micro Devices Inc

Advanced Micro Devices, Inc (NASDAQ: AMD) is a worldwide leader in semiconductor technology, specializing in high-performance computing, graphics, and visualization solutions. The company operates through four business segments. Its Data Center segment offers a range of products designed for enterprise and cloud environments, including AI accelerators, server CPUs, GPUs, APUs, DPUs, FPGAs, SmartNICs, and adaptive SoC solutions tailored for data center applications. 

As per our previous US American Technology Report published on ‘AMD’ on June 05, 2025, Kalkine provided an ‘Buy’ stance on the stock at USD 118.58 based on fundamental analysis and the stock price has now moved by ~ 31.76% since then and has attained resistance 1 and resistance 2.

Noted below are the details of support and resistance levels provided in our previous report: 

Rationale – Sell at USD 156.24

• Sequential Revenue Decline: AMD reported Q1 2025 revenue of USD7.4 billion, a 3% decrease from USD7.658 billion in Q4 2024, signaling a slowdown in sequential growth despite a strong 36% year-over-year increase. This quarter-over-quarter decline, particularly in the context of a dynamic macroeconomic and regulatory environment, may raise concerns about AMD’s ability to sustain consistent revenue momentum, especially as new U.S. export controls and tariff pressures could further impact future performance.
• Gaming Segment Weakness: The Gaming segment within AMD’s Client and Gaming division saw revenue drop to USD647 million in Q1 2025, a significant 30% decrease year-over-year, primarily due to reduced semi-custom revenue. This decline contrasts with the strong performance of the Client segment (up 68% to USD2.3 billion) and highlights vulnerabilities in AMD’s gaming business, which could weigh on overall growth if demand for semi-custom products continues to weaken.
• Rising Operating Expenses: AMD’s non-GAAP operating expenses increased by 28% year-over-year to USD2.213 billion in Q1 2025 from USD1.728 billion in Q1 2024 and rose 5% sequentially from USD2.114 billion in Q4 2024. This escalation, driven by continued investments in R&D and go-to-market initiatives, could pressure profitability margins if revenue growth does not keep pace, particularly in a challenging economic environment with potential regulatory headwinds.
• Non-GAAP Gross Margin Pressure in Q2 Outlook: AMD’s Q2 2025 outlook projects a non-GAAP gross margin of 43%, significantly impacted by approximately USD800 million in charges for inventory and related reserves due to new export controls, as noted in the company’s April 16, 2025, Form 8-K filing. Excluding these charges, the non-GAAP gross margin would be 54%, but the substantial one-time charge underscores the potential financial strain from regulatory changes, which could affect investor confidence in near-term profitability.

Valuation (Using P/E Multiple)

Share Price Chart

Conclusion

Advanced Micro Devices, Inc. (NASDAQ: AMD) reported Q1 2025 revenue of USD7.4 billion, up 36% year-over-year but down 3% from Q4 2024, with a 50% GAAP gross margin and net income of USD709 million, driven by strong Data Center (up 57%) and Client (up 68%) segment performance, though Gaming revenue fell 30% to USD647 million. Non-GAAP operating income reached USD1.8 billion but rising operating expenses (up 28% year-over-year to USD2.213 billion) and a Q2 2025 non-GAAP gross margin forecast of 43%, impacted by USD800 million in export control-related charges, highlighting potential profitability pressures. The company’s USD341.8 million cash position and strategic moves, including the ZT Systems acquisition and partnerships with Oracle and Google Cloud, support its AI and data center growth, but a 3% sequential revenue decline, regulatory challenges, and macroeconomic uncertainties pose risks.

Based on the notional gains, valuation downside and price action stance, a "Sell" recommendation on Advanced Micro Devices, Inc (NASDAQ: AMD) has been given at the current market price of USD 156.24 as on 16 July 2025, at 06:45 AM PDT.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 16 July 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock market can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.