AMD Trades at 71x P/E as AI Stock Sell-Off Trims Gains
AMD•AMD trades at 71.3 times this year's expected earnings, a multiple projected to decline to 29.6 by 2028 if revenue grows 42.7% annually and server CPU sales rise over 70% in Q2. Yet its shares slid alongside peers after reports OpenAI may postpone its IPO following SpaceX's debut.
1. Valuation and Growth Forecast
AMD shares trade at 71.3 times this year's expected earnings, reflecting Wall Street’s confidence in aggressive growth. Analysts model a 42.7% annual revenue ramp through 2028, which would lower the forward P/E to 29.6 if management’s guidance for over 70% year-over-year server CPU sales growth in Q2 holds.
2. AI Chip Stock Decline
Shares of AI chip providers including AMD slid after reports that OpenAI may delay its IPO until 2027 and following volatility from SpaceX’s market debut. The potential postponement raises concerns about near-term capital deployment for data-center chip purchases.
3. Long-Term Demand Outlook
Despite the recent pullback, AMD’s positioning in AI infrastructure and binding customer agreements support strong medium-term server processor demand. Management’s upgraded total addressable market growth forecast above 35% annually underpins the case for sustained revenue acceleration.
