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    Is Advanced Micro Devices (AMD) Still Undervalued On Its Saudi AI Buildout News?

    Simply Wall St·09/04/2026 08:29:03
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    Advanced Micro Devices (NasdaqGS:AMD) is in focus after its joint venture with Cisco and HUMAIN outlined plans to deploy up to 250 MW of AI infrastructure in Saudi Arabia using AMD Instinct and EPYC platforms.

    Advanced Micro Devices shares have cooled in recent weeks, with the 7 day share price return down 2.02% and the 30 day share price return down 5.37%. However, the stock still shows very strong momentum, with a year to date share price return of 104.13% and a 1 year total shareholder return of 201.81% at a latest share price of US$456.16.

    Spot 55 AI infrastructure stocks that, like Advanced Micro Devices, are tied to major AI build outs and could be key beneficiaries of rising demand for data center capacity.

    After a surge that left Advanced Micro Devices up more than 100% this year, followed by a cooling patch in recent weeks, the setup now hinges on one issue: Does the current valuation still offer a compelling balance between upside potential and downside risk?

    Most Popular Narrative: 49.7% Undervalued

    According to the most followed narrative on Advanced Micro Devices, a fair value of $907.32 sits well above the latest close of $456.16. This frames the recent pullback in a very different light.

    Conclusion: AMD ($AMD) offers a "Sleep Well at Night" AI exposure. It may not offer the 10x potential of a small cap, but it offers a high-probability 80-90% upside as it cements its position as the only credible alternative to the most important technology of the decade.

    Read the complete narrative. Read the complete narrative.

    Want to understand why this narrative sees so much runway left for Advanced Micro Devices at $907.32? The story leans heavily on a rapid mix shift toward higher margin data center AI, ambitious long term revenue scale, and a premium earnings multiple more often associated with market leaders. Curious which specific growth and margin assumptions need to hold for that valuation to stack up.

    Result: Fair Value of $907.32 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this Advanced Micro Devices narrative could be shaken if AI data center spending slows faster than expected, or if a rival undercuts AMD on performance or pricing.

    Find out about the key risks to this Advanced Micro Devices narrative.

    Another View on Advanced Micro Devices Valuation

    Not everyone sees Advanced Micro Devices as a simple bargain. On P/E, the stock trades at 115.1x, which is far above the US Semiconductor industry at 45.8x and peers at 43.4x. It also sits well above a fair ratio of 60.4x, which points to meaningful valuation risk if expectations cool.

    For investors, the key question is whether AMD's growth story can keep justifying such a premium, or if the share price eventually drifts closer to that fair ratio.

    See what the numbers say about this price — find out in our valuation breakdown.

    NasdaqGS:AMD P/E Ratio as at Sep 2026
    NasdaqGS:AMD P/E Ratio as at Sep 2026

    Next Steps

    If this mix of optimism and caution around Advanced Micro Devices feels familiar, act quickly and test the data against your own expectations. To see what is driving that optimism in concrete terms, review the 3 key rewards.

    Looking for more investment ideas beyond Advanced Micro Devices?

    If you only stick with Advanced Micro Devices, you could miss other setups that fit your style. Put a few minutes into screening and widen your opportunity set.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.