Advanced Micro Devices (NASDAQ: AMD) stock has delivered stunning gains of 84% so far in 2023, which may seem surprising given that the company's revenue and earnings are expected to shrink this year.

Analysts are anticipating a 3% drop in AMD's revenue in 2023 to $23 billion. Its earnings are forecasted to drop to $2.86 per share from $3.50 per share in 2022. However, the broader recovery in semiconductor stocks this year and the artificial intelligence (AI) hype have lifted AMD stock despite the uninspiring outlook. But this also means that AMD stock is richly valued right now, trading at a whopping 489 times trailing earnings.

The rich earnings multiple and the headwinds that AMD faces suggest that it may be too late for investors to buy into this semiconductor stock's growth spurt.

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Source Fool.com