AMD Inventory Levels Reveal Market Share Pressure

AMD's inventory levels do not reflect a strong market position, indicating market share pressure. This is a concern for the company's future growth prospects.

Advanced Micro Devices (AMD) has been under scrutiny for its rising inventory levels, which are raising concerns about its market position and future growth prospects. The company's inventory has been increasing rapidly, reaching a record high of $6,677 million in the June 2025 quarter, a 25% year-over-year increase from $5,374 million in the September 2024 quarter AMD: Inventory Does Not Lie^[1]. This inventory buildup is a significant concern, as it suggests that AMD might be overproducing while demand is softening.

The days of inventory (DOI) metric, which measures the number of days it takes for a company to sell its inventory, has also been a cause for concern. AMD's DOI has surged to 121.07 days, well above its historical average of 76.75 days and near the peak levels of the past 20 years AMD: Inventory Does Not Lie^[1]. This high DOI indicates that AMD's inventory is not selling as quickly as it should, which could be a sign of decreasing sales or aggressive discounting to clear inventory.

Furthermore, AMD's total receivables have been declining, dropping from $7,270 million in September 2024 to $5,686 million in June 2025, a 22% decrease AMD: Inventory Does Not Lie^[1]. This decrease in receivables suggests that AMD is either selling fewer goods or is resorting to aggressive discounts to clear its inventory, both of which are not positive signs for the company's financial health.

AMD's market share in the desktop discrete graphics card market has also been under pressure. According to data compiled by Tom's Hardware, AMD's shipments peaked in 2017-2018 at 16.1 million units but dropped to as low as 6.26 million units in Q3 2022. While shipments have recovered somewhat, they are still far from their peak levels AMD: Inventory Does Not Lie^[1]. This decline in market share is a significant concern, as it indicates that AMD is losing ground to its competitors, particularly Nvidia (NVDA).

Cathie Wood, the CEO of ARK Investment Management, also raised concerns about AMD's market position when she sold about 138,400 shares of the company, valued at roughly $22 million, in September 2025 Cathie Wood Triggers AMD Selloff With $22 Million Stock Sale^[2]. This sale came as AMD faced stronger competition in both CPUs and GPUs, with Intel (INTC) and Nvidia (NVDA) drawing renewed investor attention.

Despite these concerns, AMD has been making strides in the AI infrastructure market. The company's EPYC processors and Instinct GPUs have positioned it as a key player in the rapidly growing AI and data center markets AMD Gains Traction in AI Infrastructure Market: A Sign of More Upside?^[3]. AMD's partnerships with major players like Oracle and Cohere further underscore its growing presence in the AI space.

However, AMD's elevated P/E ratio of 41.29x, compared to Nvidia's P/E of 39.34x, suggests that the market may be overvaluing the company's prospects AMD: Inventory Does Not Lie^[1]. This elevated P/E ratio, combined with the concerns about market share pressure and inventory buildup, makes the risk/return ratio for AMD a neutral one.

In conclusion, AMD's rising inventory levels, declining market share, and high DOI are all indications of market share pressure. While the company has made significant strides in the AI infrastructure market, these concerns about its market position and financial health are a cause for concern for its future growth prospects.