Should You Buy AMD Stock Before Nov. 3?

As artificial intelligence (AI) hyperscalers race to build data centers, Advanced Micro Devices (NASDAQ: AMD) is swiftly emerging as a formidable competitor to GPU powerhouse Nvidia.

As of this writing (Oct. 28), AMD stock has skyrocketed 164% in 2026, handily outpacing both the S&P 500 and Nasdaq Composite, which have gained 12.9% and 13.8%, respectively. The company is scheduled to report third-quarter earnings on Nov. 3.

Considering shares have already enjoyed a sizable rally, should investors buy AMD stock before the upcoming announcement, or has Wall Street gotten ahead of itself? Let's take a closer look.

What does Wall Street expect for AMD earnings?

AMD's second-quarter financial results illustrated how the company is expanding. Total revenue increased 50% year over year to $11.5 billion, while adjusted earnings per share (EPS) reached $1.66. More importantly, AMD's data center business generated $6.7 billion in revenue, representing 107% growth year over year.

Naturally, this momentum raised expectations for the upcoming third-quarter report. According to Wall Street's consensus estimates, analysts anticipate AMD to generate $13.1 billion in revenue and EPS of $1.93.

Here's the challenge: Strong earnings don't automatically translate into a higher stock price. When a stock has already appreciated substantially, investors tend to expect more than simply meeting consensus estimates. AMD will need to deliver an impressive earnings beat and raise its fourth-quarter outlook to justify another rally.

Image source: The Motley Fool.

What tailwinds does AMD have?

AMD's Instinct AI accelerators are gaining traction among cloud computing companies seeking alternatives to Nvidia's chips. The company recently introduced its MI400-series accelerators, including the MI455X, designed to handle increasingly demanding AI training and inference workloads.

Meanwhile, its Helios rack-scale platform combines advanced GPUs, processors, networking, and software into one integrated AI computing system. Customers and partners include Microsoft, Meta Platforms, OpenAI, and Anthropic.

Beyond GPUs, AMD's Epyc server processors are another growth opportunity. These chips power data centers and compete with Intel's server CPUs, allowing AMD to benefit from broader AI infrastructure demand beyond accelerators.

Is it too late to buy AMD stock?

While AMD's growth prospects are compelling, its valuation deserves attention. The stock trades at a forward price-to-earnings (P/E) ratio of 35 times. For perspective, this is roughly double the long-term forward earnings multiple for the S&P 500. Against this backdrop, it's clear investors are pricing in considerable future profit growth for AMD already. While this isn't necessarily unreasonable for a semiconductor company experiencing unprecedented demand, it leaves virtually no room for disappointment.

Investors who bought AMD stock earlier this year have already enjoyed unusually high returns. It's important to realize that buying the stock today involves a much different risk-reward profile.

At this point, investors aren't simply betting that AMD will grow. Rather, they are anticipating that the company will sustain rapid growth, execute its product road map, capture additional data center market share, and generate enough earnings to justify its elevated valuation.

In reality, this is a much higher bar. This brings me to an important observation: AMD can be an excellent business without being an attractive investment at the same time.

Personally, I wouldn't rush to build a large position immediately before Nov. 3. Instead, I would prefer to see whether AMD's results support its premium valuation and provide greater visibility into its 2027 growth trajectory.

For investors with a long-term time horizon, purchasing shares gradually might be more sensible than making a large investment ahead of a potentially volatile event such as an earnings report. Ultimately, attempting to predict short-term stock movements is a fool's errand, especially when dealing with momentum-driven companies. AMD's AI opportunity is real, but much of the easy money has already been made.

Adam Spatacco has positions in Microsoft and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Intel, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.