Advanced Micro Devices (AMD) Recently Crashed Out of the $1 Trillion Club. Should You Buy the Dip?

AMD has dropped 25% from its September peak and slipped out of the $1 trillion club, even after the company posted Q3 results that showed 45% revenue growth and 97% growth in its data center segment.

The selloff hasn't cooled the long-term story. CEO Lisa Su forecasts that AMD's data center sales will more than double in 2027. That target frames the bull case: the growth is arriving at a scale that justifies a premium multiple, at least in management's view.

The valuation is the sticking point. AMD trades at a P/E of 73.5, nearly triple NVDA's 25.3. Interpretation: the market is pricing AMD for near-flawless execution on Su's 2027 target, while NVDA offers a far lower multiple. A premium of that size leaves little cushion if growth decelerates or guidance slips.

The 25% pullback hasn't compressed AMD's multiple enough to make it cheap on a relative basis. Blockbuster Q3 numbers failed to stop the slide, which suggests strong results alone may not be enough to re-rate the stock from here.