Is AMD Stock a Buy Before July 22?

Over the last few years, Advanced Micro Devices (NASDAQ: AMD) has established itself as a versatile competitor in the artificial intelligence (AI) semiconductor space, offering a broad suite of central processing units (CPUs) and specialized accelerators.

On July 22 and 23, the company is hosting a summit called Advancing AI. As the event approaches, analysts from Citigroup have published a note suggesting the conference could feature some industry-shaking announcements.

This raises a practical question for investors: Does it make sense to buy AMD stock in anticipation of the event? Let's take a look at what has Wall Street bullish on AMD and assess the company's valuation profile.

Image source: The Motley Fool.

The AI CPU market may be bigger than expected

One source of anticipation leading up to Advancing AI involves how CPUs are becoming increasingly important as AI workloads evolve. Both Citi's analysts, as well as CNBC investment personality Jim Cramer have recently highlighted the growing relevance of CPUs in agentic AI workflows, where they play a critical role alongside graphics processing units (GPUs).

Citi projects the total addressable market (TAM) for CPUs could expand from roughly $29 billion in the near term to over $131 billion by 2030. Moreover, Citi forecasts that demand for agentic CPUs will equate to roughly half the CPU TAM.

AMD's EPYC processors should position the company to benefit substantially if this comes to pass. Emphasizing CPUs during the summit may help reinforce confidence in AMD's diversified portfolio as the company moves beyond data center GPUs and establishes a more comprehensive platform across the AI infrastructure value chain.

AMD might announce a new customer

Citi's analysts are speculating that AMD might announce expanded adoption of its MI series chips, potentially including partnerships with frontier AI labs.

A company like Anthropic -- which already employs a mix of GPUs from Nvidia, Tensor Processing Units from Alphabet, and custom Trainium and Inferentia chips from Amazon Web Services -- could logically embed AMD's architecture to diversify its supply chain and optimize costs.

Should you buy AMD stock?

While any announcement involving new customers would signal validation of AMD's chips, it's not certain that will happen, so it should not be considered a guaranteed catalyst. The discussion above is inherently speculative, and even news of a single customer win would not transform AMD's investment case on its own.

Halfway through 2026, AMD stock has appreciated 159%. This sharp rise has resulted in a premium forward price-to-earnings (P/E) multiple of 75. Clearly, the market is pricing in substantial future success.

AMD PE Ratio (Forward) data by YCharts

While AMD does have compelling prospects in the AI ecosystem, attempting to time your purchases generally proves less effective than consistently participating in the stock market. A more prudent approach is to employ dollar-cost averaging over many years. This strategy will allow you to benefit from an expanding CPU opportunity as well as AMD's potential to grow its market share without your becoming overextended around one event-driven rally.

Citigroup is an advertising partner of Motley Fool Money. Adam Spatacco has positions in Alphabet, Amazon, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, and Nvidia. The Motley Fool has a disclosure policy.