Down 45% and $140 Billion… Is This Beaten-Down Chipmaker a Steal for 2025?

AMD’s been through the wringer this year (to say the least). Shares are down 11% in 2024, and since late spring, the stock has bellyflopped 45%, shedding $140 billion in market value.. But here’s the million-dollar question (or $140 billion one): Is AMD gearing up to be the Cinderella story of 2025, or are we just setting ourselves up for another chapter in "The Little Engine That Couldn’t"? To call AMD’s year a stumble would be like calling the Titanic a minor boating mishap. Supply chain problems have turned the rollout of its MI300 AI chips into a masterclass in how not to meet demand. Meanwhile, Nvidia (led by Jensen Huang, the Tom Brady of semiconductors) raked in $30.8 billion in data center revenue last quarter. AMD? A depressing $3.5 billion.

But AMD isn’t out to outmuscle Nvidia head-on. Instead, it’s playing the compatibility game. According to AMD’s EVP Forrest Norrod, their MI300 chip is designed to run seamlessly with software written for Nvidia’s hardware. Basically they’re saying: “We’ll be the Pepsi to Nvidia’s Coke… different, but good enough if you’re thirsty.” Despite the dumpster fire of 2024, analysts like Gus Richard from Northland are calling AMD a “top pick” for 2025. Why? I’m glad you asked… Richard projects AMD’s AI revenue to hit $9.5 billion next year, an 83% jump from 2024. Much of this growth could come from the MI325X chip rollout and AMD’s Turin CPUs, which he claims outperform Intel’s Granite Rapids in most workloads. (Rough year for Intel, huh? First, they lose dominance in chips, and now they’re losing their dignity.)

Then there’s the potential PC upgrade frenzy. Microsoft is finally yanking support for Windows 10, which could force millions of users to swap out their prehistoric PCs. Richard estimates AMD’s client revenue could hit $7.9 billion in 2025, with the possibility of soaring past $9 billion if 40% of the 480 million relics still running XP themes bite the dust. (Seriously, if your office desktop still has a floppy disk drive, it’s time.) On the other hand, AMD’s non-AI data center revenue is expected to jump 26% to $7.7 billion, thanks to its ASIC chips, the unsung heroes of hyperscalers. Not flashy, but these are the chips that keep the internet running smoothly… and that’s a business you can bank on. Now, before you start throwing your life savings at AMD stock, let’s talk risks. Even with its 2024 faceplant, AMD’s forward P/E ratio sits at 34… higher than Nvidia’s 29 and Intel’s bargain-bin 15. Plus, with the AI hype cooling, there’s no guarantee AMD will get the same love from investors in 2025. Nvidia’s stock has been flatter than a week-old soda, and AMD might be in for the same treatment.

If you’re thinking about hopping on the AMD bandwagon, you could do a lot worse. AI, PCs, and data centers are the future, and AMD is positioning itself to be a major player in all three markets. The stock isn’t a steal, but at 45% off its highs, it’s definitely on sale.

For long-term investors willing to ride out the volatility (and maybe pop a few antacids along the way), AMD could be the comeback story of 2025. After all, who doesn’t love an underdog with a chip on its shoulder (pun fully intended).

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Stock.News has positions in Pepsi, Coca Cola, and Intel.