Semiconductor Stocks AMD and Super Micro: Prime Buys in the AI and EV Revolution

The semiconductor sector is at a crossroads. As artificial intelligence (AI) and electric vehicle (EV) adoption accelerates, companies like AMD and Super Micro Computer (SMCI) are positioned to capitalize on twin technological revolutions. Despite near-term technical overbought conditions, strategic dominance in critical supply chains and a thaw in U.S.-China trade tensions make these stocks compelling buys for long-term investors.

AMD: Buyback Powerhouse in the AI Infrastructure Boom

AMD’s May 14 announcement of a $6 billion share repurchase program—bolstering total buyback capacity to $10 billion—sent its stock soaring 6% in a single session. This move underscores CEO Lisa Su’s confidence in AMD’s ability to generate free cash flow while expanding its AI footprint. The buyback not only reduces shares outstanding but also signals to investors that AMD’s 55-year track record of innovation remains intact.

The semiconductor giant’s Q1 2025 results ($7.44 billion in revenue, up 36% year-over-year) provide a solid foundation for its ambitions. Its collaboration with Saudi Arabia’s Humain on a $10 billion AI initiative—a 500-megawatt supercomputing project—further positions AMD as a pillar of the global AI infrastructure boom.

While AMD’s trailing P/E of 86.39 may appear rich, its forward P/E of 23.21 reflects expectations of earnings growth. Analysts’ “Buy” consensus, with price targets up to $200, suggests the market is pricing in upside tied to AI adoption.

Super Micro: China’s AI Infrastructure Play and EV Synergy

Super Micro’s $20 billion partnership with Saudi Arabia’s DataVolt—a deal announced alongside its Q1 results—propelled its stock up 16% in early May. The company’s dominance in direct-liquid-cooled (DLC) servers, critical for AI workloads, aligns it with the global hyperscale data center boom.

While governance concerns and insider selling have spooked some investors, Super Micro’s ties to China’s tech ecosystem remain underappreciated. The company’s modular server designs are integral to EV leaders like Tesla, which rely on high-performance computing for autonomous driving systems. Even as supply chain hiccups persist, the $20 billion Saudi deal and rising AI demand in Asia-Pacific markets justify optimism.

Super Micro’s 14-day RSI of 69.34 (as of May 17) hints at overbought conditions, but its 40% surge week-to-date reflects investor enthusiasm for its AI play. With a forward P/E of 24.22 and a “Hold” consensus rating, the stock offers asymmetric upside as EV and AI demand solidify.

The Tailwinds: Trade Truce and S&P 500 Momentum

The U.S.-China tariff truce, announced in early May, has reinvigorated tech sector optimism. Reduced trade barriers mean smoother supply chains for both AMD and Super Micro, which rely on cross-border manufacturing. The S&P 500’s 9% YTD gain further signals a risk-on environment, benefiting semiconductor stocks.

Why Buy Now?

Critics may point to overbought technicals or margin pressures, but three factors justify immediate action:
1. AI’s Explosive Growth: The global AI market is projected to hit $145 billion by 2030. AMD’s GPUs and Super Micro’s servers are foundational to this shift.
2. EV Software Demand: EVs require AI-driven systems for battery management and autonomous driving—areas where both companies are embedded.
3. Valuation Misalignment: Despite recent rallies, AMD trades at a forward P/E half that of NVIDIA, while Super Micro’s 19.43 P/E offers a discount to its growth peers.

Final Call: Technicals Will Follow Fundamentals

While RSI metrics suggest caution, the AI and EV revolutions are no flash in the pan. For investors with a 3-5 year horizon, AMD’s $10 billion buyback and Super Micro’s hyperscale deals represent a rare combination of valuation leverage and strategic positioning.

Act now—before momentum shifts.

In a world where AI and EVs are reshaping industries, these semiconductor leaders are not just participants—they’re architects of the future.