Advanced Micro Devices (NASDAQ: AMD) has been one of the best-performing large-cap tech stocks of 2025, with shares up more than 30 percent year to date.
And yet, the real opportunity for investors might just be starting now.
As of July 21, AMD trades at $157 per share, near the midpoint of its 52-week range, which spans between $76 and $174.
What stands out is not just the rally, but the setup heading into its next earnings report on August 5.
With AI momentum, China policy relief, and a new product roadmap all converging, AMD could be one of the most important stocks to watch heading into August.
This is not about reacting to another quarter of strong results. It is about positioning ahead of what could become a significant re-rating moment.
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The AI Gap Is Narrowing Fast
AMD is no longer trying to catch Nvidia in data center AI. It is now winning real contracts.
The company confirmed earlier this year that one of the largest developers of frontier AI models is now using AMD GPUs for daily inference, a critical component of running generative AI in production environments.
That is a big shift. Most of the early AI buildouts revolved around training models, which has been Nvidia’s stronghold.
But inference workloads are growing rapidly and are expected to outpace training in overall compute demand eventually.
This favors AMD, which has focused its MI300 and MI350 chip series on high-efficiency inference performance.
In Q1 2025, AMD’s data center revenue grew 57 percent year over year.
That segment accounted for the majority of AMD’s 36 percent total revenue growth in the quarter. Operating income from data center chips surged 72 percent.
Now that the MI350 series is already shipping, AMD is preparing for its next leap forward.
These chips utilize the 3nm process node, support FP4 and FP6 formats, and efficiently handle trillion-parameter models.
The company is also building toward the MI400 launch in 2026, which will further enhance memory capacity and bandwidth.
The takeaway for investors is simple. AMD’s AI roadmap is real, visible, and being validated by major cloud providers.
Nvidia remains the leader, but AMD no longer appears to be a distant second.
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Key Catalysts Before Earnings
AMD’s next earnings report is scheduled for August 5. For investors looking to get in before that release, there are several key catalysts and metrics to watch.
1. MI350 Traction
The company has confirmed that more than 35 MI300-series platforms are in production across all major cloud and enterprise providers.
Look for signs of customer expansion or order acceleration for the MI350 in earnings commentary or third-party press.
2. China Revenue Recovery
U.S. regulatory changes have allowed AMD to resume shipments of its MI308 chips to China. This could unlock $800 million or more in previously lost revenue.
Any updates on shipment volumes or licensing progress could significantly move the stock ahead of actual earnings.
3. Data Center Revenue Guidance
Analysts expect Q2 revenue to come in around $7.52 billion, with Q3 forecasts moving higher based on the China rebound and MI350 ramp.
If management raises full-year guidance to reflect these trends, that could mark a turning point for valuation.
4. Institutional Rotation
With a market capitalization of $255 billion, AMD is a large enough name to be included in major ETFs and growth funds.
Any hint of accelerated top-line growth, paired with stabilization in embedded or gaming segments, could bring large-scale buyers back into the stock.
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Why the Setup Looks Attractive
The stock has already run, but it is not overextended. AMD trades at roughly 115 times trailing earnings, but that number is misleading.
With forward earnings expected to more than double in 2025, its forward valuation could normalize quickly.
Bernstein recently raised its price target to $140, still below the market price, but Wells Fargo, HSBC, Citi, and BofA Securities now all have targets between $165 and $200.
Mizuho sees upside from China shipments and resumed MI308 sales. HSBC estimates AI-related revenue could hit $15.1 billion by 2026.
All of these points point to a market that is only beginning to factor in AMD’s new role in the AI ecosystem.
While Nvidia remains the primary story, AMD is quietly becoming a credible number two, with plenty of room to grow.
Even small share gains in the AI data center market could have a big impact. Nvidia’s data center revenue topped $39 billion last quarter.
AMD’s was just $3.7 billion. Doubling that number is not impossible, especially with new contracts and regulatory tailwinds.
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What Could Go Wrong
AMD still trails Nvidia in developer mindshare and software ecosystem maturity. Most AI researchers are building for CUDA, which remains the default standard for training models.
Valuation is also elevated by some metrics.
The stock trades well above its fair value according to discounted cash flow models, and any revenue miss or margin compression could lead to a sharp correction.
There is also a chance that U.S. regulators may reverse recent license approvals, especially if political tensions with China escalate.
That would significantly impact the near-term China rebound thesis.
Another concern is customer digestion. After a strong Q1, some analysts worry that enterprise and hyperscale clients may slow orders to absorb inventory.
A weaker Q3 guide could cause some volatility.
However, most of these risks are known. The market has priced in considerable caution.
That makes a strong print on August 5 even more powerful if the company beats expectations and raises guidance.
What to Watch in the Weeks Ahead
The key to playing AMD from here is to stop reacting and start anticipating.
Investors should track:
New contract announcements with major cloud providers or LLM developers
Channel checks for MI350 shipments and MI400 progress
Regulatory commentary on China sales
Investor sentiment shifts from neutral to bullish among big funds
If these signals turn positive before earnings, AMD could stage a breakout. A move back toward the $170 level would not be surprising if August results come in hot.
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Final Take
AMD is no longer just riding the coattails of the AI boom. It is building its own momentum.
With a clear product roadmap, strong execution, and favorable policy tailwinds, the company is positioning for a multi-year run.
The upcoming earnings report could be the moment when the broader market fully recognizes that shift.
Investors do not need to chase the highs. They need to understand the trend.
If AMD continues to gain ground in AI inference and regains lost ground in China, the stock could make a decisive move higher.
The rally has not ended. It may have just started.
That’s all for today. Thank you for reading. If you have any feedback, please reply to this email.
Best Regards,
— Adam Garcia
Elite Trade Club
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