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hey everyone in this video I'm going to update my stock price prediction for AMD stock given all the changes in artificial intelligence and the improvements in the AI Market expected in 2024 I'm going to update my prediction for AMD stock so I made this prediction a little over one month ago and there are some factors that have changed and I'm going to look at this prediction in a different perspective to provide a different Outlook for AMD stock in 2024 facto AMD stock is its forward price to earnings ratio and you can see right now it's trading at a forward PE of 35 I'm also going to need amd's current stock price right now AMD is trading at $191 per share you could see in 2024 it's jumped nicely already and that jump started I would say late 2023 as it became apparent that artificial intelligence is booming and AMD will participate with its new product in the market that's poised to gain some market share it's not going to challenge Nvidia right off the bat but it is going to gain some market share as clients will look to diversify their supply chain away from Nvidia nobody likes to be reliant on one single supplier and so they will give Nvidia a challenge because they're just going to take some market share just to diversify Supply chains analysts that follow AMD stock this is what they think AMD will deliver in earnings per share in 2025 now you'll notice this number has been increasing over the last 3 months 90 days ago Wall Street thought that AMD was going to bring in $466 60 days ago they thought $511 30 days ago they thought they thought $545 7 days ago they thought $548 so they've had to increase their forecast for AMD stock earnings per share as time has progressed and that's been the case throughout the AI Market if you've been a viewer of of my channel for the last 3 6 and N months you've often heard me talk about AI companies AI Market being much better than expected every single month like we are optimistic about the AI market and then one month moves forward and we get even more optimistic another month moves forward and we get even more optimistic and that's been surprising given how popular AI investing has been in 2023 and 24 it's not like investors have not been bullish on the AI Market they have been bullish on the AI market and continuously we've been proven not to be bullish enough and that's been a continuous surprise that surprised me progressively as the time has went on of course I've had AMD stock rated as a Buy in fact I placed AMD stock rated as one of my top stocks to buy in 2024 and I made that prediction on December 30th so I have been bullish on AMD stock but apparently I have not been bullish enough as it has outperformed even my most optimistic expectations so here I am updating amd's forecast for 2024 now that we have those numbers we can start to look at our price prediction so if AMD does indeed hit these milestones and is on Pace to hit $548 in earnings per share in 2025 and its forward price to earnings ratio stays at 35 as where it is right now the stock price could be $191 180 by the end of this year surprisingly close to where it's actually at right now $191 44 so in order for amd's stock price to increase one of these factors needs to improve either the earnings per share for 2025 estimate or the forward price to earnings estimate and given that the earnings per share estimates have continuously been revised upward and given that the forward price to earnings ratio is about average it's not relatively cheap it's not below average according to its previous three years I would say the more likely scenario is that the earnings per share gets revised upward as the year goes forward as results come in and we continue to see the AI Market performing better than expected I suspect these earnings per share estimates for 2025 will be moved upwards again but if the earnings per share the forward PE moves lower to 30 the stock price could fall to 164 if the forward PE Falls to 25 the stock price could fall to 137 if the forward PE Falls to 20 the stock price could fall to 10 9 this final scenario I see as very unlikely for amd's forward PE ratio to fall to 20 I see that as unlikely given its prospects given its earnings per share growth its position in the AI market and I haven't even yet mentioned that the CPU industry is rebounding in 2024 and 2025 the personal Computing industry where AMD has a strong presence is improving Intel forecasts low singled digigit increases in personal computers in 2024 Micron which sells memory and storage forecasts a low to mid single digigit increase in 2024 and both Intel and Micron forecast even better growth in 2025 as the PC industry rebounds from the bottoms in 2022 and 2023 so those are our Catalyst that will lift amd's earnings per share higher over the next couple of years of course supplemented by the huge demand for AI chips and AI market demand that AMD is also going to participate in so for all those reasons I think the earnings per share estimates will be revised upwards and I think amd's stock price will fall in the higher end of these forecasts here so my estimate for AMD stock price in 2024 is between $2 and $10 per share and $240 per share a scenario that's higher than what I have here so I'm forecasting an earnings per share revision upwards of roughly $1 per share which will increase its expected stock price in by the end of this year my previous estimate was for AMD stock price to be between $190 per share and $230 per share for 2024 so I'm increasing that estimate here in this video by roughly 10% given the new data that's coming since I made that previous prediction of where AMD stock price will be in one year I want to say a little over one month ago so data has come in that's gotten me to upgrade this forecast for AMD stock
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