5-star analyst sends AMD stock investors a warning

Advanced Micro Devices (AMD) bulls were expecting Wall Street to proceed rewarding the banal pursuing a momentous tally spearheaded by AI demand, data-center expansion, and renewed assurance successful the chipmaker's roadmap.

For perspective, according to Seeking Alpha, AMD has dramatically outperformed the broader market, surging 5.6% implicit the past week, 15% implicit the past month, and 169% implicit the past six months.

Instead, according to TheFly.com , a caller enactment from William Blair expert Sebastien Naji added a much cautious code to the debate.

Naji's a 5-star expert according to TipRanks, ranking him 157 retired of 12,372 Wall Street analysts, with an 81% occurrence complaint and a 56.5% mean instrumentality per rating. 

The telephone stands retired due to the fact that AMD has not precisely been abbreviated of bully news. Revenue is growing, AI partnerships are expanding, and investors person been treating the institution arsenic 1 of the fewer credible challengers successful the accelerator market.

But Naji's presumption complicates that casual bullish story.

AMD's AI accidental looks arsenic monolithic arsenic ever, yet the banal mightiness request much than excitement to support climbing.

Why William Blair's AMD telephone stands out

William Blair's Sebastien Naji is questioning however overmuch of AMD's AI communicative investors person already paid for.

He initiated Advanced Micro Devices with a market perform standing and a $565 fair-value estimate, framing the banal arsenic already adjacent to reasonably valued pursuing its AI-driven surge. 

Though helium feels AMD is simply a large AI infrastructure beneficiary, it is not an evident bargain astatine existent levels, pursuing a superb rally, with the company's marketplace worth surging implicit $902 billion. 

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In addition, according to Seeking Alpha, AMD banal trades astatine implicit 73 times guardant non-GAAP earnings, 195% higher than the assemblage median and 91% higher than the 5-year average. It is besides trading astatine implicit 18 times guardant income estimates, 426% higher than the assemblage median.

To enactment it simply, the upside lawsuit mightiness beryllium real, but the banal isn't inexpensive capable to pursuit without caller evidence.

Nevertheless, Naji's ain numbers constituent to large net growth, including expected EPS of $7.90 successful 2026 and $15.59 successful 2027. He besides sees AI exemplary deployment, inference, and agentic AI driving request crossed GPUs, CPUs, and different silicon.

But the competitory risks are rising successful tandem.

In CPUs, Naji talked astir unit from Arm, Qualcomm, Nvidia, and Intel, with Intel perchance regaining competitiveness successful server CPUs astir 2028 with Coral Rapids. In GPUs, Nvidia remains the biggest obstacle due to the fact that of its bundle vantage and broader platform.