AMD Stock Surges on AI GPU Launch and Record Q1 Earnings Amid Strategic Saudi Partnership

Advanced Micro Devices (AMD) has seen a significant resurgence in its stock performance, gaining close to 50% since a post-Liberation Day low point approximately two months ago. This marks a notable shift from its decline in late 2024 and early 2025. The company's strong Q1 2025 earnings report, which recorded record revenues of $7.4 billion and gross margins of 54%, has bolstered investor confidence. Additionally, AMD announced a $10 billion partnership with Saudi Arabia's HUMAIN, further enhancing its market position. The AI inference market is projected to grow at an explosive 80% CAGR, potentially creating a $500 billion AI accelerator market by 2028. A top investor, ranked among the top 4% of TipRanks stock professionals, highlights AMD's promising position to capitalize on this growth. The investor, Stone Fox, notes that if AMD captures 10-20% of the AI accelerator market, its data center revenues could reach $50-$100 billion by 2028. AMD's upcoming MI355x GPU, set to launch in mid-2025, is expected to outperform Nvidia's B200 GPU by generating up to 40% more tokens per dollar. Despite these positive developments, AMD faces the challenge of competing with industry-dominant Nvidia. The company's recent $6 billion share buyback and strong profitability further underscore its financial health. Analysts remain divided on AMD's valuation, with some cautioning against overvaluation while others see significant upside potential.