Should Investors Buy AMD Stock Today?

요약 보기

AMD는 2026년 2월 실적 후 주가 급락(약 190달러)을 매수 기회로 보고 매수로 상향했고, 현재 약 235달러로 상승. 2025년 매출 34% 증가, 2026년에도 유사 성장 예상, 2027·2028년 추가 성장 전망. 엔비디아 대비 데이터센터 점유율 열세와 하이퍼스케일러 자체 칩 투자가 리스크. 예상 선행 PER 35배로 엔비디아(20배 중후반)보다 비쌈. 자체 DCF 적정가 186달러로 현재가 대비 소폭 고평가. 매수 의견 유지, 다만 10~15% 추가 상승 시 매수 근거 한계에 근접. 본인은 엔비디아 보유, AMD 미보유.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. Earlier this year, in early February, to be more precise, AMD reported quarterly financial results that I thought were pretty solid. Still, investors disagreed, and the share price crashed to around $190 per share. And I saw that as a buying opportunity, and I upgraded AMD stock to a buy in the aftermath of that earnings report.

02. Going into that earnings release, I thought AMD stock was overvalued. Remember, going into that earnings release, AMD was trading at above $250 per share, and I thought that was a little bit overvalued for the business at that time. But after the earnings results, I thought it was a great opportunity at 190 a share, and I'm happy to see that the stock price has jumped since that upgrade.

03. It's now trading at $235 a share. So, investors are asking me what I think about AMD right now after the share price has jumped, and after we've gotten more information about the dynamic situation surrounding artificial intelligence, the war in Iran, tariffs, etc., and all the other implications. So, I'll give you an update on my buy, hold, or sell rating, and I'll give you an update on my fair value calculation for AMD here.

04. . AMD finally started accelerating revenue growth. Nvidia started its huge increases in revenue in early 2023, late 2022, but AMD was a little bit later to follow. In 2023, AMD's revenue actually declined by 4%, and in 2024, it only increased by 13.7%. Even though spending on artificial intelligence was booming, AMD didn't have the products that fit what the hyperscalers were highly demanding.

05. But then, the company started releasing more products that fit with the needs of hyperscalers, and it started gaining meaningful market share. I've been talking about how those hyperscalers have been looking for an alternative to Nvidia, and AMD could be one of those solutions. In 2025, AMD's revenue jumped by 34%, and it's expected to grow by a similar amount this year.

06. In 2027, the analysts expect a bigger increase for AMD at 44%, and then another 30% in 2028. Nvidia still boasts the lion's share of the data center market. It estimates that it has a market share of around 90%. And I talk about how hyperscalers are uncomfortable with Nvidia having that large of a market share, and want to give other companies like AMD an opportunity.

07. Additionally, hyperscalers are investing in their own chips. Amazon, Microsoft, um Meta, Alphabet, they're all investing and creating their own chips, their own proprietary chips, to use in addition to what they're getting from Nvidia, and in addition to what they're getting from AMD. Now, if AMD will Now, I will say AMD will continue getting opportunities to gain market share, but if it doesn't make strides, meaningful strides, the hyperscalers might prefer investing in their own technology, their own proprietary chips, to offset the risks for their exposure to Nvidia.

08. So, they might, after a few years Now, they are going to, in my opinion, give AMD a few more years, but after those few years, if they notice that their own internal chip efforts are making a lot better progress, and they offer a lot better in terms of competitive advantages for the companies, they might use that as the alternative, uh exclude AMD from their technology needs altogether.

09. Now, that's just my speculation. That might not be what happens, but I'm just trying to put myself in their shoes, and that's kind of the way I would think about this situation going forward. If I was one of the CEOs at these large hyperscalers like Amazon or Microsoft, I would feel uncomfortable with Nvidia capturing so much of that market share, especially because Nvidia's gross profit margins are approaching 75%.

10. I would feel uncomfortable paying Nvidia these kinds of premiums, and still not get enough of Nvidia's chips as it's still sold out, and it still has more demand than it has supply. So, I would be investing in, you know, AMD, giving AMD an opportunity, and I would also be investing in our own internal efforts to build our own chips to diversify away from Nvidia.

11. AMD's margins have also been improving, but they're nowhere near the levels of Nvidia. Its return on invested capital at 6.6% doesn't even exceed its weighted average cost of capital. The operating cash flow to sales ratio at 22% is only a fraction of where Nvidia is on this metric, but it is improving.

12. And if AMD's revenue increases at the level that's forecasted over these next 3 years, I wouldn't be surprised if these these figures continue moving significantly higher. I wouldn't be surprised if the cash flow to sales ratio exceeds 30% and approaches 40%, and similar with the return on invested capital over the next 3 years exceeding 30% approaching 40% if they do indeed execute and hit those targets on revenue growth.

13. Now, valuation is a lot less attractive when I look at AMD compared to Nvidia, and that's partly why I've been informing investors that I prefer Nvidia stock over AMD. For me, it's an easy decision. I actually own Nvidia stock, and I don't own AMD. AMD is trading at a forward price to earnings of 35.

14. Nvidia is trading at a forward price to earnings of uh the low to mid-20s. So, AMD is trading at a premium valuation compared to Nvidia, and AMD has less of a competitive advantage compared to Nvidia. Its margins are less favorable compared to Nvidia. The only thing AMD has going for it that Nvidia doesn't is that AMD is much smaller and has a lot more upside.

15. That's something that with Nvidia approaching a huge multi-trillion-dollar valuation, it doesn't have as much upside as AMD, and I would agree with that sentiment. Now, when I value the business using my proprietary discounted cash flow model, I would say the stock looks uh slightly overvalued as well with the market price of $237, and I calculated its intrinsic value at $186.

16. Only slightly overvalued after applying a margin of safety, not that large amount of an overvaluation, certainly something that AMD can grow into with just one or two solid positive quarterly financial results that exceed expectations, and cash flow that exceeds my estimates. For 2026, I'm estimating the company will deliver $7.3 billion in free cash flow, and I'm estimating that figure grows substantially from 7.3 billion in 2026 up to 23.17 billion in 2029.

17. So, as I mentioned, I've had I upgraded AMD stock to a buy, and I made that update initially after the share price fell to 190 in early February following that earnings results. And then I updated this stock on March 31st, again reiterating that buy rating. And so today, I will reiterate that buy rating again.

18. I do like AMD stock. Risk versus reward, if I was just looking at the company in isolation, I do see it as a buying opportunity. That being said, if I was an investor that was looking at AMD stock, and I don't own Nvidia stock, I would much rather prefer buying Nvidia stock instead of AMD, but I do think AMD is still a buying opportunity even at these prices, but it's approaching the upper limit of where I would rate the stock a buy.

19. Another 5 or 10% higher from here, or I should say another 10 to 15% higher from here, and I believe it would stretch the limits of my buy rating. .