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AMD stock is up almost 29% year-to- date in 2025. And of course, I'm happy about that because I rated AMD as one of the best nine stocks to buy in 2025. And I made that recommendation right at the beginning of the year. So, if you bought AMD shares right when I made that recommendation, you will have appreciated your shares by almost 30%.
Also, I made a price target for AMD stock for 2025, and my price target is between $150 a share and $170 per share. As of this recording, AMD is now trading at $155 a share. So, it's already entered the lower end of my price target for AMD stock for 2025. So, I'm happy to see my research is paying off here for AMD stock investors.
In this video, I'll answer where I think AMD stock price will be by the end of next year. So, I'm already looking ahead to 2026, and I'm making my AMD price prediction for next year by the end 2026. Where do I think the price will be? But before we get into the meat of the video, let me thank the sponsor of this video, fiscal.ai.
They're my preferred data provider and they save me a lot of time and provide great insights utilizing their services. One of the things I like most about fisc.ai is the really cool charts that are insightful. The one I have pulled up here is for AMD comparing its total revenue and its business segments.
The client revenue segment and the data center revenue segment. I've been most interested in the data center revenue because that's the segment that's growing the quickest, right? If uh you've been following my channel, you know just how much clients are spending on building out is allowed me to see something ahead of time with AMD and it's partly what allowed me to recommend AMD as one of the best stocks to buy in 2025 and uh provide that price target because I noticed a trend of the companies improving business as it relates to data center.
So what you can see here the data center business in purple compared to the overall revenue in orange you can see over these last 3 years the data center as a percentage of its overall revenue has soared from just 1.7 billion in 2020 out of 10 billion in revenue so roughly 17% of the company's overall business.
Now it consists of 13.9 billion out of 28 billion. So roughly half of its business now consists of the data center segment which is a lot more attractive and it makes this business a lot more interesting for investors. So thank you 're interested in joining their services. You get a discount for using my affiliate link.
So back to the meat of the video which is making my AMD stock price prediction for 2026. Now, to make that estimate, I need several numbers to make that prediction. And again, I'm getting my numbers from fiscal.ai. They aggregate investor information. This one in particular is the earnings per share estimate for AMD in the year 2027.
Now, when you're making a price prediction for 2026 and you're using the forward price to earnings ratio like I will be, you need the earnings per share estimate for one year ahead. And that's the number I will be pulling here. The $6.95 is what the analysts on Wall Street that are following AMD stock, that's what they believe .
So, I'm going to be using this number in conjunction with the company's forward price to earnings number. Right. Again, here at fiscal.ai with the chart for can see AMD's forward PE has soared up to 38 as I predicted to start the year. I made this similar price prediction and I said one of the reasons why the company's share price will increase in 2025 is because the forward PE multiple will increase and the reason why the forward PE multiple will increase.
I said is because the business will be more heavily weighted on the data center segment which will make it a more attractive business because the data center segment is growing much quicker than the rest of its business and the company's uh overall revenue is likely to increase as a result of just maintaining market share in the data center segment.
Even if it doesn't increase its market share, just by keeping its market share, it'll benefit from the tailwind of the rising market. the amount that people are spending on data center expansion. So, I'm going to use this forward price to earnings ratio of 38. Okay. So, now we can jump into my scenario analysis for AMD stock.
As you can see, the $6.95 figure is the 2027 earnings per share estimate. And I shared with you where I got this number. The forward PE of 38 is the number we just saw from fiscal.ai. If the company goes ahead and there's no change and it progresses in hitting its earnings per share estimate in 2027 and the forward PE ratio stays the same, the price could increase to $264 per share.
That would be a nice increase from the current price of $155 per share. However, I think the more likely scenario is that AMD's forward price to earnings will decline. uh because it at 38 it's the highest it's been for this company in a very long time and I did expect and I did feel that it was justified for the company's forward PE to rise.
I think it has risen a little too much. So I expect a little bit of a pullback in the company's forward PE ratio going into 2026. So, if the forward PE ratio were to decline to 35, the share price would still rise, but to 243. If the forward PE ratio were to increase to 33, the price could rise to $230 a share.
And if the forward PE were to decline to 30, the price would still rise, but to $210 per share. So even in these scenarios where I have the company's forward PE ratio declining just by the magnitude of the earnings per share increase that's likely to lift the share price higher. And AMD's earnings per share increase is fueled by the growth in its artificial intelligence business, which I expect will continue at least through this year, next year, and probably the year after that because the companies I'm following that are buying these products continue telling investors that they will buy as much as is available because the returns on those investments are so lucrative for those companies that they will keep investing in this technology at least for the next couple of years.
We have a line of sight into their revenue prospects for at least the next couple of years and then it becomes more uncertain if we go out you know beyond 3 years. Uh the outlook for the industry becomes a little bit more uncertain, a little more varied. It could be really really good. It could be a little bit lower than expected.
Uh that remains to be seen but for now we have a good line of sight and we can determine that revenues are likely to be very strong for participants in this category which include AMD and of course the giant uh Nvidia as well. So all that being said where do I think AMD shares will end by the end of 2026?
I think we're going to see the forward PE multiple decline closer to 30 or 33. And I think the share price will rise to between $210 and $230 per share by the end of next year, which would be another nice increase from the current share price of $155 per share if the company goes ahead and hits these targets.
So, as you can see here, I've had AMD stock rated as one of the best nine stocks to buy this year, and I updated that recommendation today after my research into the company. I also updated the 2026 price target to between $210 and $230 per share. I have these buy, hold, and sell ratings available for channel members at the investor tier and above.
I have over 200 companies that I'm following that I have a buy, hold, or sell rating on. And then I have price targets for some of the companies that I'm following, not all of the companies. And I also provide along with this access to the buy, hold, sell recommendations. Investor tier members and above get access to hundreds of discounted cash flow valuations on all of the companies that I'm following.
And these are cash flow valuations like you can see here for SoFi stock where I derive a free cash flow estimate for the next decade and take the present value of those estimates and come with an intrinsic value per share. All this for less than $15 a month I think is a bargain. .
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