AMD Considers Discrete NPU Development Amid AI Application Talks

AMD is considering developing discrete neural processing units (NPUs) to power AI applications. This could open a new revenue stream for the company, competing with Nvidia's GPUs. AMD stock slipped 0.16% on Thursday, but is up 48.37% year-to-date and 35.44% over the past 12 months. The company will report Q2 2025 results on Aug. 5, 2025. Analysts' consensus rating is Moderate Buy with an average price target of $156.47, representing a 12.68% downside for the shares.

Advanced Micro Devices (AMD) is exploring the development of discrete neural processing units (NPUs) to power AI applications, potentially opening a new revenue stream and challenging Nvidia's dominance in the GPU market. The news comes as AMD stock has experienced significant year-to-date and 12-month gains, with a year-to-date increase of 48.37% and a 12-month rise of 35.44%.

The company will report its Q2 2025 earnings on August 5, 2025, following a strong Q1 performance that saw revenue increase by 36% year-over-year (YOY) to $7.4 billion, with non-GAAP net income rising by 55% YOY to $1.6 billion [1]. Analysts expect AMD's EPS to rise by 18% YOY in fiscal 2025, before improving by around 57% annually to reach $4.86 in fiscal 2026 [1].

Despite the positive outlook, AMD stock slipped 0.16% on Thursday, July 2, 2025, but remains up 48.37% year-to-date and 35.44% over the past 12 months. The consensus rating is Moderate Buy, with an average price target of $156.47, representing a 12.68% downside for the shares [2].

The development of NPUs could provide AMD with a competitive edge in the AI market, which is expected to grow significantly in the coming years. However, the company faces stiff competition from established players like Nvidia and Intel, which have already made inroads into the NPU market.

In conclusion, AMD's exploration of NPUs for AI applications is a strategic move that could open up new revenue streams. However, the success of this initiative will depend on the company's ability to differentiate its products and capture market share from established competitors.

References:
[1] https://finance.yahoo.com/news/amd-reports-august-5-analyst-151421941.html
[2] https://www.barchart.com/story/news/33779877/can-amd-stock-hit-210-in-2025