Key Points
AMD's growth rate is expected to ramp up.
AMD's stock is highly valued for the performance it's putting up.
AMD (NASDAQ: AMD) has been a great stock pick in 2026. Although it has sold off over the past few days, it's still up over 160% for the year. However, many investors are wondering if it can claw some of those losses back and get to the $600-per-share level.
Let's take a look at AMD and determine if it can get to this level, which it nearly hit at the end of June.
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AMD is a pricey stock
AMD is commonly compared to Nvidia for good reason. These two compete in many business segments, including the most important in all of computing: The artificial intelligence (AI) build-out. So far, Nvidia has eaten AMD's lunch and has snagged the early-mover advantage, but AMD is still delivering solid results in its own right.
In the first quarter of 2026, its data center division grew revenue by 57% year over year, while its other divisions produced less spectacular results. Overall, AMD grew revenue at a 38% year-over-year pace, but it was flat quarter over quarter. That should raise some eyebrows, as AMD's data center growth should be skyrocketing enough to offset any Q4 strength.
However, that's not what's happening.
Wall Street analysts expect growth to ramp up, with its overall revenue growth rate for 2026 estimated to clock in at 44%, and 2027's growth expected to be 60%. Those are solid figures, and AMD will have to execute at a high level to achieve them, but the problem is that all of that success is already priced into the stock.
AMD is a very expensive stock, trading at 61 times forward earnings and 33 times next year's earnings.
AMD PE Ratio (Forward) data by YCharts
For reference, Nvidia trades for 30.2 times trailing earnings. So, if we assume that Nvidia's valuation is what a company like AMD should be valued at over the long term, then it's clear that AMD already has nearly two years' worth of growth priced into the stock (AMD and Nvidia haven't reported Q2 2026 results yet). This is a major red flag and shows that the market may have put the cart before the horse with AMD stock.
So, can AMD get to $600 per share? Maybe, but it will be because of inflated expectations. AMD is very expensive following its massive gains in 2026, and I think investors can find far better values in the market.
Keithen Drury has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.