AMD Slides 3.2% After OpenAI IPO Delay Raises AI Demand Concerns
AMD•AMD shares fell 3.2% after reports that OpenAI may delay its IPO until 2027, joining other AI chip stocks in a sector selloff triggered by volatility following SpaceX's recent IPO debut and reduced near-term demand outlook. The stock trades at 71.3 times this year's expected earnings with analysts forecasting 42.7% annual revenue growth through 2028, driven by a revised server CPU market projection of over 35% annual expansion and a 70% year-over-year CPU revenue guide for Q2.
1. Sector Selloff Hits AMD
AMD joined peers in a 3.2% decline as reports of an OpenAI IPO delay into 2027 shook AI chip demand expectations, compounded by volatility following SpaceX’s recent public debut and uncertainty over near-term spending on data center processors.
2. High Valuation Hinges on Future Growth
The stock’s current multiple of 71.3 times projected 2026 earnings reflects a steep premium that assumes a 42.7% compound annual revenue growth rate through 2028, implying a dramatic acceleration from the 35.0% growth achieved over the past year.
3. Server CPU Market Reforecast
Management now forecasts its total addressable market for server CPUs to expand at over 35% annually, underpinning guidance for more than 70% year-over-year CPU revenue growth in Q2 and forming the core thesis for meeting lofty growth targets.
