Should You Buy the Dip on AMD Stock?

By Keithen Drury – Feb 23, 2026 at 6:05AM ESTKey PointsAMD's data center growth is accelerating.Management sees a long-term growth rate of 60% from this important segment. We’re bullish on these 10 stocks ›NASDAQ: AMDAdvanced Micro DevicesMarket Cap$326BToday's Changeangle-down(-1.62%) $3.30Current Price$200.07Price as of February 20, 2026 at 3:58 PM ETThe market didn't appreciate AMD's latest quarterly results.Like many tech stocks so far in 2026, Advanced Micro Devices (AMD 1.62%) has hit a rough patch. The stock entered the year priced around $210, then quickly rocketed up to more than $250 by the end of January. It promptly fell following its Q4 2025 earnings announcement, and now sits nearly 23% down from its recent high and about 24% down from its all-time high established in late 2025. With that kind of sell-off going on, investors need to determine if the price drop is warranted or if it's just a market overreaction to an earnings report. Let's take a look and see if AMD is a great stock to buy now. Image source: Getty Images. AMD is doing what management said it would For nearly all of its life, AMD has been compared to others rather than being recognized for what it's doing by itself. Originally, it was being dominated by Intel (INTC 1.22%) in the processor world, and many think Intel essentially let it survive so that it would not be investigated for being a monopoly. Now, AMD is constantly being compared to Nvidia (NVDA +0.94%), its primary competitor in the artificial intelligence (AI) sector. ExpandNASDAQ: AMDAdvanced Micro DevicesToday's Change(-1.62%) $-3.30Current Price$200.07Key Data PointsMarket Cap$326BDay's Range$198.57 - $204.8552wk Range$76.48 - $267.08Volume5.7KAvg Vol36MGross Margin45.99% AMD has struggled to capture a significant market share of data center computing units, and history seems to be repeating itself. However, management believes that it has made the proper changes and innovations to start to capture some of that market share. Back in November, it gave guidance that the data center division will grow at a 60% compounded annual growth rate (CAGR) through 2030, while the overall CAGR would be closer to 35%. So, how did Q4's results stack up in relation to that guidance? Overall, AMD's revenue growth was 34% in Q4. This suggests it met internal expectations. However, AMD's non-data center sales contributed just as much to hitting guidance, as data center revenue only increased 39% year over year. That's obviously less than the 60% CAGR management forecast, but it's a step in the right direction. In Q3, AMD's data center growth was 22%, so if it continues this upward trend throughout 2026, then AMD is working toward hitting management's projections. I wouldn't call AMD's comeback complete; there's still a long road ahead for its data center division. However, I think it's on the right track. The level of sell-off after the report was unwarranted, and investors could be well served to buy the dip today with expectations that results will improve throughout 2026.Read NextFeb 19, 2026 •By Jose NajarroAMD Responds to Rumors About Potential DelaysFeb 19, 2026 •By Jose NajarroAMD Shareholders Received Amazing News From a Massive New CustomerFeb 19, 2026 •By James Brumley3 Predictions for Advanced Micro Devices in 2026Feb 18, 2026 •By Harsh ChauhanIs AMD Stock a Buy Now?Feb 18, 2026 •By Rick MunarrizCathie Wood Goes Bargain Hunting: 3 Stocks She Just BoughtFeb 16, 2026 •By Manali Pradhan, CFA3 Things Every AMD Investor Needs to KnowAbout the AuthorKeithen Drury is a contributing Motley Fool technology analyst covering AI, semiconductors, cybersecurity, and SaaS stocks. In addition to The Motley Fool, Keithen is a mechanical engineer and has held roles at Honeywell and smaller industrial companies like Brand Hydraulics and Lincoln Industries. He holds a bachelor’s degree in mechanical engineering from Dordt University.TMFTripleOptionStocks MentionedAdvanced Micro DevicesNASDAQ: AMD$200.07 (1.62%) $3.30*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.