Advanced Micro Devices (AMD +1.66%) stock closed out Wednesday's daily session with big gains. The semiconductor company's share price rose 4.9% in a day of trading that saw the S&P 500 index climb 1.6% and the Nasdaq Composite rise 2.5%. The stock had been up as much as 8.7% earlier in the day's trading.
NASDAQ: AMD
Key Data Points
AMD stock jumped today following developments that suggest that the trade war between the U.S. and China could see a meaningful de-escalation in the not-too-distant future. But even with a significant rally over the last couple days of trading, AMD stock is still down 25% in 2025 and 57% from its high.
Is now the time to buy AMD stock?
AMD's valuation has seen a big drawdown over the last year as investors have become more cautious about the company's growth outlook in the artificial intelligence (AI) market. Escalations in the trade war and recent news that the company is effectively banned from selling its MI308 graphics processing units (GPUs), and could take a write-down of up to $800 million on the product inventory have added to pressures.
On the heels of recent sell-offs, AMD is now trading at roughly 20 times the average analyst target for this year's earnings -- although it's likely that earnings estimates will continue to come down as trade and tariff headwinds become clearer. With the company poised to launch its MI350 AI accelerator in the second half of this year and follow it up with its MI400 accelerator in 2026, shares could be a worthwhile addition for risk-tolerant investors with a long-term holding horizon. But investors should understand that the company still faces high levels of uncertainty in the data center space, and it's clear that Nvidia is still top dog when it comes to AI processors.
