Advanced Micro Devices, Inc

Advanced Micro Devices, Inc. (NASDAQ: AMD) is a global semiconductor manufacturer specializing in high-performance computing, graphics, and visualization solutions. The company operates through four main segments: Data Center, Client, Gaming, and Embedded.

As per previous Kalkine’s American Tech Report published on ‘AMD’ on Sep 09, 2025, Kalkine provided an ‘Buy’ stance on the stock at USD 153.68 based on fundamental analysis and the stock price has now moved up by ~ 44.51% since then and has breached Resistance Level 2.

Noted below are the details of support and resistance levels provided in our previous report:

Rationale:

• Export Restrictions Weigh on Profitability: AMD’s second-quarter performance was significantly impacted by U.S. government export controls on its Instinct™ MI308 data center GPUs, which restricted shipments to China. These controls resulted in approximately USD 800 million in inventory and related charges, severely pressuring profitability. As a consequence, AMD’s GAAP gross margin fell to 40%, down 9 percentage points year-over-year, and operating results swung to a loss of USD 134 million. The restrictions not only curtailed sales in a key market but also disrupted AMD’s data center momentum, underscoring the vulnerability of its AI GPU segment to geopolitical and regulatory headwinds.
• Margin Compression and Rising Costs: Despite record revenues, AMD’s profitability metrics deteriorated sharply, highlighting rising operational pressures. Gross margin contracted both on a GAAP and non-GAAP basis — down 9 and 10 percentage points year-over-year respectively — while operating expenses surged 23% year-over-year to USD 3.2 billion. This cost escalation was driven by increased R&D investments and higher product launch expenses across AI, server, and PC lines. The sharp margin decline, combined with elevated spending, led to a steep 150% drop in GAAP operating income and a 29% fall in non-GAAP operating income, signaling strained efficiency amid aggressive expansion efforts.
• Weakness in Embedded Segment: AMD’s Embedded segment, once a steady contributor to its diversification strategy, experienced a decline in performance. Revenue dropped 4% year-over-year to USD 824 million as demand in end markets remained mixed, reflecting macroeconomic softness and slowing industrial and networking demand. The subdued performance in this segment underscores AMD’s exposure to cyclical industries and its dependence on broader economic recovery to stabilize growth in non-consumer and non-AI segments.
• Decline in Non-GAAP Profitability and Execution Risks: While AMD achieved strong top-line growth, its non-GAAP earnings fell substantially, reflecting execution challenges and external pressures. Non-GAAP operating income declined 50% quarter-over-quarter, and diluted EPS dropped 30% year-over-year to USD 0.48. These declines suggest that AMD’s profitability remains under stress even when excluding one-time charges. Moreover, the company faces growing execution risk as it ramps up production of next-generation AI accelerators and integrates new strategic partnerships. Sustained margin recovery and operational stability will depend on AMD’s ability to offset regulatory impacts, control costs, and ensure the smooth transition to its MI350 and MI400 product cycles.

Valuation (Using Price/ Earnings per share Multiple)

Share Price Chart

Conclusion

Give the target level given in previous Buy report, and one day extremer price action a "Sell" recommendation on Advanced Micro Devices, Inc. (NASDAQ: AMD) has been given at the current market price of USD 222.08 as on 06 October 2025 at 7:30 am PDT.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 06 October 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.