What Is One of the Best Chip Stocks to Hold for the Next 10 Years?

Over the next decade, you’ll surely want to own at least one artificial intelligence (AI) chip stock. You might assume that all you need is NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) stock and nothing else. However, even though NVIDIA is the market’s darling, your best pick could actually be Advanced Micro Devices (NASDAQ:AMD) stock.

Even though it’s a giant company, Advanced Micro Devices is an underdog in some respects. Unlike NVIDIA, Advanced Micro Devices isn’t a member of the Magnificent Seven group of highly favored U.S. mega-cap stocks.

This isn’t to suggest that buying and holding AMD stock for 10 years is a risk-free investment. Right now, we’ll tackle the red flags that must be acknowledged for long-term Advanced Micro Devices shareholders. In the end, though, you may be open to a buy-and-hold share position as Advanced Micro Devices is a chipmaking challenger with hyper-scaling potential.

Issues With AMD Stock

One possible deal-breaker for income investors is that AMD stock doesn’t pay a dividend. Consequently, you’ll need the share price to rise in order to make a profit.

Meanwhile, value investors might take issue with Advanced Micro Devices’ valuation. Specifically, the company has a trailing 12-month price-to-earnings (P/E) ratio of around 113x.

In addition, AMD stock is already up 135% over the past five years. Given the triple-digit P/E ratio and the stock’s price action, some value investors may not be willing to take a chance on Advanced Micro Devices.

Those are valid objections, but to be fair, Advanced Micro Devices stock just pulled back nearly 20% from $167. Since the stock has a good track record of recovering from drawdowns, there appears to be a dip-buying opportunity here.

Besides, if Advanced Micro Devices is a robust revenue and earnings grower, then the high P/E ratio don’t have to be a deal-breaker. With that in mind, let’s perform a thorough checkup on Advanced Micro Devices’ financial health.

Booming Sales, Zooming Profits

Advanced Micro Devices’ high P/E ratio and lack of a dividend are legitimate reasons to reduce your position size in AMD stock. Nevertheless, you’ll probably leave a lot of money on the table if you don’t own some shares of Advanced Micro Devices during the next 10 years.

All in all, Advanced Micro Devices is an undeniable sales and income grower. To prove this point, we can observe the company’s results from the quarter ended September 27, 2025.

Impressively, Advanced Micro Devices’ net revenue grew 35.6% year over year, from $6.819 billion in the year-earlier quarter to $9.246 billion. Nearly half of that revenue stemmed from Advanced Micro Devices’ Data Center segment; this suggests that the company continues to benefit from AI-associated sales.

Turning to the bottom-line results, Advanced Micro Devices’ net income surged 61.2%, from $771 in the year-earlier quarter to $1.243 billion. Also during that time frame, the company’s cash and cash equivalents increased 27%, from $3.787 billion to $4.808 billion. So evidently, Advanced Micro Devices remains a cash-rich chipmaker that’s on a powerful growth trajectory.

Making Headway in China

While U.S. chip sales are crucial to Advanced Micro Devices’ business model, it definitely appears that the company is making headway in China’s chip market. To be more specific, Alibaba (NASDAQ:BABA) is considering purchasing 40,000 to 50,000 of Advanced Micro Devices’ MI308 AI accelerators.

This is important because investors need to think globally, not just locally, over the next 10 years. China is a major chip market, and Advanced Micro Devices has a long-term growth opportunity there.

Advanced Micro Devices made a savvy move in designing its MI308 chips to be compatible with export restrictions. Furthermore, the company has secured export licenses for these chips and is prepared to pay a 15% fee to the U.S. on approved sales in China.

Also, it’s a positive sign that Advanced Micro Devices CEO Lisa Su recently met with Chinese Commerce ​Minister Wang ‌Wentao in Beijing. They “exchanged views on the company’s business ⁠development in ​China and ​strengthening cooperation with China,” according to the ‍ministry.

Sure, NVIDIA is also making headway into China’s chip market. At the same time, however, NVDA stock may have already priced in the company’s progress in this region.

In contrast, Advanced Micro Devices’ growth story in China is still developing and the market needs time to recognize this. Give it a few years, and you should see AMD stock reflect strong chip sales in both the U.S. and China.

Give AMD Stock a Chance

In the final analysis, there’s no need to overload your portfolio with AMD stock. Just holding a moderately sized share position for 10 years will, most likely, put you in a profitable position without undue risk.

While Advanced Micro Devices doesn’t pay a dividend and appears overvalued at first glance, I still encourage you to give the company a chance. If AI chip sales remain strong and Advanced Micro Devices keeps on growing its sales and profits, there’s an attractive reward-to-risk profile here for buy-and-hold investors.