Chip Stocks Are Overvalued. Here’s Some Positive Developments.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 16 2025
0mins
Source: Barron's
- Tech Stocks Analysis: Tech stocks are not currently in a bubble according to at least one measure.
- Semiconductor Market: The semiconductor sector is facing challenges, but the situation may not be as dire as it appears.
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Analyst Views on AMD
Wall Street analysts forecast AMD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMD is 284.10 USD with a low forecast of 200.00 USD and a high forecast of 377.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
36 Analyst Rating
27 Buy
9 Hold
0 Sell
Strong Buy
Current: 252.740
Low
200.00
Averages
284.10
High
377.00
Current: 252.740
Low
200.00
Averages
284.10
High
377.00
About AMD
Advanced Micro Devices, Inc. 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. Client and Gaming segment includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services. Embedded segment includes embedded CPUs, GPUs, APUs, FPGAs, system on modules (SOMs), and Adaptive SoC products. It markets and sells its products under the AMD trademark. Its products include AMD EPYC, AMD Ryzen, AMD Ryzen PRO, Virtex UltraScale+, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
TSMC Reports Stellar Q4 Results and Capital Spending Plans
- Significant Revenue Growth: TSMC's Q4 revenue surged 25.5% year-over-year to $33.73 billion, with a gross margin of 62.3%, reflecting strong market demand and profitability, thereby reinforcing its leadership position in the semiconductor industry.
- Capital Expenditure Plans: Management anticipates capital spending between $52 billion and $56 billion in 2026, with approximately 40% of revenue allocated to capital expenditures, indicating strong confidence in future growth and ongoing investment in the AI market.
- Increase in Advanced Process Share: Three-nanometer chips accounted for 28% of total wafer revenue, five-nanometer for 35%, and seven-nanometer for 14%, totaling 77% of revenue from the most advanced processes, highlighting the robust demand driven by AI applications and TSMC's technological edge.
- Geopolitical Risk Management: TSMC is actively expanding into the U.S. and Japan to reduce reliance on Taiwan, enhancing the stability and resilience of its global supply chain, ensuring competitiveness in a rapidly changing market environment.
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Three Strong Alternative AI Stocks to Nvidia
- Taiwan Semiconductor's Market Position: As the world's largest chip foundry, TSMC anticipates a nearly 60% CAGR for AI chips from 2024 to 2029, with a projected 30% year-over-year growth in 2026, significantly enhancing its market share and profitability.
- Broadcom's AI Transformation: Broadcom's AI semiconductor revenue reached $6.5 billion in Q4, up 74% year-over-year, with expectations of $8.2 billion in Q1, indicating that AI will comprise 43% of total revenue, showcasing rapid growth potential in the AI sector.
- AMD's Competitive Strategy: Although AMD trails Nvidia in the AI race, its data center division is projected to achieve a 60% CAGR by 2030, positioning itself as a more competitively priced alternative that could see a resurgence during tight resource periods.
- Importance of Investment Diversification: While Nvidia has a bright outlook, investors should consider alternatives like TSMC, Broadcom, and AMD to mitigate risks and capitalize on diverse opportunities within the AI market.
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