AI Chip Stocks Sold Off This Week. Is AMD a Buying Opportunity or a Falling Knife?
Written by Daniel Sparks for The Motley Fool -> AMD's data center revenue grew 57% in its most recent quarter. The company expects another step up in revenue in the current quarter. The stock trades at more than 100 times earnings. Semiconductor stocks took a hit this week. T
AMD's data center revenue grew 57% in its most recent quarter.
The company expects another step up in revenue in the current quarter.
Semiconductor stocks took a hit this week. The selling began with Broadcom , whose latest quarterly report lacked the wow factor investors had hoped for. That was enough to pull much of the group lower, from Nvidia on down, after a stretch in which chip stocks had run to record highs.
Advanced Micro Devices (NASDAQ: AMD) got swept up in the downdraft, slipping from the all-time high it set in early June. There was no company-specific news behind the move; the stock simply traded down with its peers. So, for investors eyeing the pullback, the question is whether this is a chance to buy one of the better-positioned artificial intelligence (AI) names or a falling knife best left alone.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
The case for buying starts with how well AMD is executing. In the first quarter of 2026, the chipmaker's revenue rose 38% year over year to $10.3 billion -- an acceleration from 34% growth in the fourth quarter of 2025. Driving it was the data center segment, where revenue jumped 57% to $5.8 billion -- an acceleration from the 39% growth this business posted just a quarter earlier. That segment notably now accounts for more than half of AMD's revenue and has become the company's main engine.
"These results mark a clear inflection in our growth trajectory and a structural shift in our business," said CEO Lisa Su during the company's first-quarter earnings call.
And the momentum may build from here. AMD guided for current-quarter revenue of about $11.2 billion, implying approximately 46% year-over-year growth. And the bigger opportunity sits further out. The company's next-generation Instinct MI450 accelerators and its Helios rack systems are set to begin ramping in the second half of the year. Additionally, Meta Platforms has agreed to deploy up to 6 gigawatts of AMD Instinct GPUs, with the first wave built on custom MI450 silicon -- a commitment that could keep the data center business growing quickly well into 2027.
