<div id="readability-page-1">The Federal Reserve may have cooled this year's market rally on Wednesday, telegraphing a slowdown in its pace of rate cuts. The news sent the major market indexes lower, but most investors are still having a great year. Less than a third of the market's large-cap stocks are trading lower in 2024.Fewer than 6% -- or 50 of the 853 names with market caps north of $10 billion trading on a U.S.-listed exchange -- hit new 52-week lows in Wednesday's markdown. One of the more compelling names on that list has to be Advanced Micro Devices (AMD -0.27%). The semiconductor giant offers investors a rare play in artificial intelligence (AI) and has failed to follow tech stocks higher in 2024. Below I'll explore why AMD hitting its lowest share price in more than a year should be a dinner bell instead of a warning bell. <div> Being in the right place at the right time isn't always enough for a company to ride the coattails of a hot trend. AMD is experiencing a surge in demand for its AI processors but has other segments of its operations stuck deeply in reverse. Revenue for its data center segment soared 122% in its latest quarter. AMD may not be the first name that investors think about when considering the pick-and-shovel plays of the AI revolution, but heavy demand is lifting all chip ships. You need new and powerful processors for the resource-intensive new normal of AI video editing and image generation, content creation, and graphics performance. It also has to be kind on the battery life when AI is being worked on using portable PCs. AMD may have been slow to catch on to the AI trend, but its recent success is making a difference to its overall business. The $3.5 billion that it delivered in data center revenue in the third quarter is more than half of its $6.8 billion in total revenue. The problem for AMD is that some of its former revenue drivers can't seem to shift out of reverse. Its gaming segment has seen its business plummet 69% over the past year, largely due to a sharp decrease in its semi-custom revenue. AMD's larger embedded segment business has experienced a 25% year-over-year drop in revenue. One business that's positive outside of its data center boom is its client segment, clocking in with a 29% increase in revenue for its latest quarter. The end result of all of these moving parts is that total revenue rose a modest 18% in AMD's third quarter. It's a far cry from the top-line jumps that the more obvious AI plays are reporting. Natural leader and market darling Nvidia experienced a 94% increase in its latest fiscal quarter. However, it doesn't mean that AMD deserves to be discarded in the land of lost toys this holiday season. <div><img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MDE1NjUvZ2V0dHlpbWFnZXMtMTMyMTMzNDI3NS5qcGcmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84MDE1NjUvZ2V0dHlpbWFnZXMtMTMyMTMzNDI3NS5qcGcmdz03MDA"/>Image source: Getty Images. </div> <h2>The case for bouncing back in 2025</h2> As bad as AMD has performed this year -- with the shares trading 18% lower in an otherwise buoyant 2024 -- the out-of-favor semiconductor icon is still doing a lot of things right. Its bottom line has topped analyst expectations in all three quarters so far this fiscal year. Margins are widening, and adjusted net income climbed 31% in its latest report. AMD's 18% increase on the top line is its strongest year-over-year move in two years, and it's starting to step on the gas. Its own guidance calls for revenue to grow by 22% for the current quarter. Analysts see revenue rising 27% for all of next year. The bottom line should continue to grow even faster. AMD is currently trading for 24 times forward earnings. It's not a cheap multiple, but the stock is more than reasonable for a legitimate AI play that's starting to muscle its way back into the spotlight. If AMD isn't on your investing radar, maybe it deserves to be at this point with such a compelling entry point. </div></div>

The Federal Reserve's signals of slowing rate cuts led to a market sell-off, impacting stocks like Advanced Micro Devices (AMD), which hit a new low. Despite a 122% revenue surge in its data center segment, AMD's overall revenue rose only 18% due to declines in gaming and embedded segments. However, AMD's adjusted net income increased by 31%, and analysts predict a 27% revenue rise next year. With a forward P/E of 24, AMD presents a compelling investment opportunity in the AI sector, despite its current struggles.

- The Federal Reserve's indication of a slower pace in rate cuts has impacted market indexes, yet most investors are still performing well in 2024.  
- Advanced Micro Devices (AMD) is experiencing significant demand for its AI processors, with a 122% revenue increase in its data center segment, despite challenges in other areas like gaming.  
- AMD's overall revenue rose 18% in the third quarter, and analysts project continued growth, suggesting it may be a worthwhile investment opportunity as it adapts to the AI trend.

This AI Stock Hit a New Low in Wednesday's Sell-Off: Is It Time to Buy?