AMD’s Stock Faces Harsh Reality Despite OpenAI Hype
So, there’s been a lot of buzz around AMD lately, especially after the company announced its high-profile, multi-year partnership with OpenAI. Naturally, this sent excitement rippling through the markets — investors rushed in, thinking this was the big move that could put AMD on par with tech giants like Nvidia. But according to a recent analysis from Seeking Alpha , the enthusiasm might be running way ahead of reality.
The report, written by the research group Bears of Wall Street , paints a much more cautious — even pessimistic — picture of AMD’s current position. They’ve actually rated AMD as a Sell , pointing to overvaluation, unrealistic market expectations, and serious execution risks tied to that OpenAI deal.
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Now, here’s where it gets interesting. While the OpenAI partnership sounds massive, it’s not an exclusive deal . That means OpenAI can still work with other hardware suppliers — Nvidia, for instance — which already dominates the AI chip market. So even though AMD is aiming to supply advanced processors for AI workloads, the real financial gains from this collaboration aren’t expected to kick in until late 2026 .
On the valuation side, AMD’s stock is looking stretched. It’s currently trading at around 60 times forward earnings , which is actually higher than Nvidia’s valuation — and that’s despite AMD having weaker profit margins, lower cash flow, and heavier capital expenditure requirements. In simple terms, investors are paying a premium for growth that might not fully materialize anytime soon.
According to the analysis, AMD’s intrinsic value — that’s the fair price based on its projected future cash flows — comes in at just $61.90 per share . That’s about 74% lower than where it’s currently trading. So if that model holds true, there’s a real risk that AMD’s stock could face a steep correction.
The analysts also pointed out that this surge in optimism seems largely fueled by hype around artificial intelligence and AMD’s association with OpenAI. But as we’ve seen many times before, hype can only carry a stock so far before fundamentals catch up.
In short, while AMD’s partnership with OpenAI is exciting on the surface, it’s not a guaranteed ticket to long-term growth — and the market might be overestimating just how much it will actually impact AMD’s bottom line. If these projections prove accurate, investors who jumped in at the top could end up feeling that they’ve been caught in an AI-driven bubble.
So, even though AMD remains a key player in the chip industry, this latest analysis serves as a reminder: sometimes, what looks like the next big thing in tech can turn out to be more risk than reward — at least in the short term.
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