As a leading semiconductor company, Advanced Micro Devices (AMD 1.13%) has strong positions in multiple high-growth markets. The tech giant has collaborated with industry leaders such as Microsoft, Alphabet, Sony, and more, which has led it to play a crucial role in the cloud computing and console gaming markets.

AMD's stock has soared roughly 50% year to date, rallying investors with positive quarterly results and its potential in artificial intelligence (AI). However, the company's shares remain down 9% year over year after an economically challenging 2022, which triggered steep declines in the PC market.

As a result, now is an excellent time to consider investing in AMD stock and learn more about how the company is building the future. Here are three things about AMD that smart investors know.

1. AMD's growing position in data centers

AMD's expansion in data centers has offered it a lucrative way to continue profiting from its computing components, even amid reduced consumer spending. The company's graphics processing units (GPUs) and processors power data centers worldwide, which run cloud platforms such as Amazon Web Services, Azure, and Google Cloud. 

According to Grand View Research, the cloud market was valued at $484 billion in 2022 and is projected to expand at a compound annual growth rate of 14.1% through 2030. Meanwhile, AMD is already profiting from the industry's development. In fiscal 2022, AMD's data center segment reported a 64% rise in revenue of $6 billion, with operating income climbing 68% to $1.8 billion.

As cloud platforms expand, so will demand for AMD's data center chips. The company's Genoa series of data center chips launched in November, beating Intel's competing chips released in January after two years of delays. Even more promising, benchmarks have also shown AMD's server chips outperform Intel's in "general purpose workloads," according to Bernstein analyst Stacy Rasgon.

AMD's Genoa chips so far have Microsoft's Azure, Google Cloud, and Oracle signed on as clients. 

2. A booming custom chip business

In addition to data centers, AMD is a leader in semi-custom chips, providing the graphics and processing power in multiple devices from other companies through its system on a chip (SoC).

Some of the company's biggest collaborators in this area are Sony and Microsoft, with AMD exclusively supplying the SoC for the PlayStation 5 and Xbox Series X/S game consoles. The lucrative partnerships were the main driver of growth in AMD's gaming segment in 2022, with revenue rising 21% year over year to $6.8 billion. Comparatively, Nvidia's gaming segment reported a revenue decline of 27% in fiscal 2022, hit by its reliance on consumer GPU sales, despite providing SoCs to the Nintendo Switch.

Moreover, AMD is steadily becoming the go-to chipmaker for handheld devices, supplying a SoC to Valve's Steam Deck and numerous others. Its dominating position in SoCs could be lucrative in the long term as other products, such as virtual reality headsets, seek higher-powered systems like AMD's.

3. AMD stock is a bargain buy

AMD shares have soared 930% in the last five years and 4,000% in the previous decade. The company has a robust business that is likely to continue expanding for decades thanks to its solid position in multiple areas of tech. As a result, AMD's stock is an immensely attractive long-term buy, especially at its current price compared to the competition.

The tech giant is most often compared to Nvidia, with both semiconductor companies active in PC components, various chips, data centers, and gaming. And AMD's stats against Nvidia's make it a bargain.

AMD's forward price-to-earnings ratio of 18 compared to Nvidia's 39 means its current price offers far more value. Furthermore, looking at their price/earnings-to-growth ratios, which also account for future earnings, AMD's 0.90 is preferable to Nvidia's 4.04. 

As far as tech stocks go, AMD is a diversified company with a strong history of growth, making its stock a must-buy.