After suffering a massive decline during 2022's bear market, Advanced Micro Devices (AMD 3.04%) has staged a dramatic comeback in recent months. Since its October low, it has risen by more than 54%.

However, even after the recent surge, the semiconductor stock is down by approximately 48% since November 2021. Have investors missed the opportunity to buy AMD at a discount or is there still have a chance to profit from AMD?

AMD has some short-term challenges

Given the 54% price performance of the past few months, one could easily conclude that they missed the boat on AMD. Some of the gains AMD and many other tech stocks saw can be attributed to recent indications that interest rate hikes from the Federal Reserve are finally leveling off. But such good news can only go so far.

Another cause for investor concern is some signs of slowing that have begun to emerge. For the full year 2022, revenue grew 44% to almost $24 billion. But year-over-year growth in the fourth quarter was just 16%, suggesting growth is slowing. Additionally, more than half of the 44% growth came from the Xilinx portion of the company, specifically the Embedded and Data Center segments. It reported nearly $4.6 billion in revenue for 2022, a massive increase from $246 million in 2021. Without these gains from Xilinx, the Q4 numbers would have shown revenue declines.

Declining revenues in the gaming and client segments slowed growth, and the company expects that situation to worsen. AMD forecasts a 10% year-over-year decline in revenue for the first quarter of 2023, which could bode poorly for the stock's near-term performance.

Reasons to consider AMD

Even with those short-term problems, AMD continues to fire on all cylinders in one area: data centers. Data center revenue grew 64% during 2022, taking its revenue above $6 billion, a massive surge versus the $3.7 billion in revenue in 2021.

AMD also reported its 14th consecutive quarter of market share gains in Q3, rising to 17.5%, according to Mercury Research. Since Intel reported declining data center revenue in Q4, it appears that Intel's problems belong to Intel.

Moreover, the chip industry has suffered from a generalized slump, and AMD management acknowledged the slower demand in the macro environment on its Q4 2022 earnings call. This is likely because the pandemic front-loaded much of the chip demand in 2020 and 2021. 

Furthermore, in late 2022, AMD recorded its lowest price-to-sales (P/S) ratio since before the pandemic. Even though the P/S ratio rose to 6 in recent weeks, it remains cheap historically.

So, is it too late?

Given its current conditions, long-term investors likely still have time to buy AMD stock and reap rewards. Indeed, it has increased dramatically from its October low, and its gaming and client sectors are in the grips of the tech slowdown.

However, investors need to remember that the semiconductor industry is a cyclical business. Furthermore, the data center segment is not only bucking the negative growth trend, but it is also consistently capturing market share from Intel, so much so that AMD has become a serious threat to Intel's dominance. Such victories over its archrival should bode well for AMD's stock long term.