Advanced Micro Devices, Inc.

Section 1: Company Overview, Shariah Compliance Standards and Fundamentals

Section 1.1: Advanced Micro Devices, Inc. (NASDAQ: AMD) is a global semiconductor company. The Company is focused on high-performance computing, graphics and visualization technologies. Its segments include Data Center, Client and Gaming, and Embedded. Data Center segment includes artificial intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), smart network interface Cards (SmartNICs) and Adaptive system-on-Chip (SoC) products for data centers. 

Kalkine’s ‘The Shariah Compliance Report’ covers the Investment Highlights, Shariah-compliance standards, Key Financial Metrics, Risks, and Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

Section 1.2: What are the Key Metrics for Shariah Compliance to be Considered?

The Shariah Compliance Report aims to identify equities that align with Shariah and ethical principles, providing valuable insights on financial metrics, business activities and compliance with Islamic finance norms.

Key Shariah Screening Criteria and Thresholds

Shariah Metrics for Advanced Micro Devices Inc (NASDAQ: AMD):

Revenue Segmentation of AMD in Q2FY25 & Historical Compliance of Financial Ratios:

1.3 The Key Positives, Negatives, and Investment summary   

1.4 Top 10 shareholders:

The top 10 shareholders together form ~29.13% of the total shareholding, signifying concentrated shareholding. The Vanguard Group, Inc., and BlackRock Institutional Trust Company, N.A. are the biggest shareholders, holding the maximum stake in the company at ~9.49% and ~5.33%, respectively.

1.5 Key Metrics:

AMD’s top line has compounded at ~27% over the last four years (USD 9.8B → 25.8B), with gross profit compounding ~27% as well. After a margin trough in 2022 (GM 36.0% amid PC destocking/Xilinx integration), gross margin recovered to 43.7% in 2024 as mix skewed toward higher-ASP EPYC/Ryzen. Q2 FY25 revenue rose 32% YoY to ~USD 7.7B on record EPYC/Ryzen and strong semi-custom, consistent with management’s guide to a further step-up in Q3 on MI350 accelerators and continued CPU share gains.

Despite the strong sales print, Q2 FY25 profitability lines show the impact of the USD ~800M inventory write-down tied to MI308 export restrictions and elevated AI R&D: gross margin fell to 35.8% (vs. 42.7% a year ago), EBITDA margin halved to 8.1%, and operating margin dipped negative (-1.7%). Below the line, however, net margin improved to ~10% (vs. 4.5%) and cash generation strengthened (TTM FCF yield 1.49% vs. 0.51%), lifting TTM returns (ROE 4.7%, ROA 3.8%). Management targets a ~54% non-GAAP gross margin in Q3 as MI350 ramps and the one-time inventory charge falls away, pointing to a near-term rebound in operating leverage.

Section 2: Business Updates and Financial Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

 2.2 Insights of Q2FY25:

Section 3: Key Risks and Outlook:

  Section 4: Stock Recommendation Summary:

4.1 Technical Summary:

• Trend Overview and Moving Averages Analysis: AMD (NASDAQ: AMD) exhibits a strong uptrend, trading around USD 230.53, well above its 50-day MA (USD 176.11) and 200-day MA (USD 133.03), confirming sustained bullish momentum. The steep rise in short-term averages and wide separation from the long-term average reflect strong buying sentiment. The stock’s current consolidation near recent highs indicates a healthy pause before potential further upside.
• Momentum Indicators and Market Strength: The RSI (14) at 69.6 signals strong bullish momentum, though nearing overbought territory, suggesting possible short-term consolidation. Continued RSI strength above 60 highlights solid investor confidence, supported by AMD’s robust financial results and optimism surrounding its AI-driven growth.
• Technical Outlook and Key Levels: AMD faces near-term resistance around USD 241–245, with a breakout potentially leading toward USD 255–270. Key support levels are seen near USD 215–210 and USD 180. Sustained trade above USD 210 would maintain bullish sentiment, keeping AMD’s overall outlook positive on strong momentum and favorable fundamentals.

 4.2 Fundamental Valuation

Valuation Methodology: Price/Earnings Per Share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 17, 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided have been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.