Advanced Micro Devices vs. Arm Holdings: Which AI CPU Stock Is the Better Buy?

AMD and Arm Holdings are both positioned to benefit from growing AI CPU demand, particularly in inference and agentic AI workloads. AMD's EPYC CPUs are already seeing strong adoption with 57% data center revenue growth and expectations for 70%+ year-over-year server CPU growth. Arm is expanding beyond licensing into finished chips with its AGI CPU, backed by over $2 billion in customer demand. However, both stocks trade at premium valuations (AMD at 75x and Arm at 179x forward earnings). AMD appears more attractive for near-term revenue visibility, while Arm offers longer-term platform potential with higher execution risk.