AMD Management Is Buying Millions of Shares of AMD Stock. Should Investors Buy AMD Stock, Too?

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AMD 경영진이 자사주 매입(2024년 590만주, 잔여 승인 47억달러)을 통해 주가가 저평가라는 신호를 보내고 있으며, 선행 PER 17배로 낮고 AI 데이터센터 성장성이 크다고 주장. 자체 DCF 적정가 주당 246달러(이전 180달러)로 상향, 전체 종목 중 상위 9위 매수 추천.

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01. in 2024 AMD bought back 5.9 million shares of its stock to me that indicates that amd's management team feels that the stock is undervalued and I've agreed with that for the last year two years now so amd's management team has bought the dip so to speak when the company's stock price has felt undervalued they've spent billions of dollars buying back their shares so in this video I'm going to elaborate on that and answer the question if AMD buying back their shares should we be buying their shares during the most recent quarter The company generated $1.3 billion dollar in cash flow from operations and $1.1 billion in free cash flow since the company doesn't do manufacturing of its semiconductors it outsources that it doesn't really need that much cash to invest in capital expenditures right so that free cash flow that the company generates is available for management to use for things like share BuyBacks and in 2024 they repurchased 5.9 million shares and on top of that returned 862 million to shareholders they still have $4.7 billion remaining in their share repurchase authorization so I wouldn't be surprised if AMD stock price remains low if they go out and repurchase billions of dollars of their shares here in 2025 just to remind everyone AMD stock 7 the lowest it's been going back a year the lowest it's been and given the company's growth prospects given its expectations for free cash flow growth that's transparent to the market it feels like this is a huge bargain and amd's management certainly feels that way they're going out and buying billions of dollars worth of their shares now I also want to make a point here a lot of management teams go out and say that they feel their Shares are undervalued and I hate to pick on Tesla again but I will do so again because it it illustrates my point you hear Tesla's management team going out and talking about how they feel that Tesla stock could be the most valuable company in the world in three years and five years and they could be worth trillions and several trillions of dollars and how they have these trillion several trillion dollar opportunities right they're going out and speaking that to whoever will listen but are they going out and buying buying back their stock are they going out and using their money Tesla has over $30 billion on the balance sheet are they using any of that to buy back stock not really right they're actually the management team you've seen Elon Musk sell billions of dollars of shares of Tesla stock in recent years doing the opposite right why would you be selling so much if you think the stock is going to be worth trillions of dollars you'd rather own uh Twi than own shares of Tesla which you think is going to be worth trillions of dollars right that's the big difference there amd's management has said they feel their Shares are undervalued and they've gone out and purchased it and they've prepared themselves to purchase billions more in their stock so they're not going out publicizing every day and talking about how they feel their Shares are worth trillions of dollars they're just quietly going out and buying back billions of dollars in sh of their stock Apple is doing a similar thing here they're not going out publicizing talking about and boasting about how valuable they think their Shares are they're saying hey look if you don't think our Shares are valuable you go ahead and feel that way we're just going to go out there and spend billions of dollars buying back our shares you can go ahead and and underestimate us all you want we'll just go out and keep buying our shares so that's a big difference when a management team team of course a CEO and CFO of a management team of a company they're incredibly biased to try and highlight the positives of their business right of course they're you know every CEO does that they're you know one of their roles is to go out and promote their shares to investors but there's a difference between just going out and promoting and talking about how you think your Shares are undervalued and going out and spending billions of dollars or hundreds of millions of dollars buying those shares and then you have management teams and managers that try to say that they feel their Shares are undervalued but at the same time they're selling their shares and trading it for something else so that's something interesting with AMD their forward PE is incredibly low and then I recently AMD stock on February 6th after the company announced earnings and after Wall Street analyst updated their free cash flow forecasts for AMD ncreased for AMD stock up to $246 uh previously the intrinsic value per share I had for AMD was around $180 so the intrinsic value has increased from my previous um discounted cash flow for AMD which I did a couple of months ago at I tend to update these about every 3 to 6 months because that's when the free cash flow forecasts get updated as the company announces quarterly earnings results and I get more information I update these models with the new information that comes in and the new information that came in for AMD was positive for its long-term prospects so for the first quarter AMD is forecasting revenue between 7.1 billion uh plus or minus 300 million which would be a 30% growth from the same quarter last year and this is going to be driven by strong growth in their Data Center and client business the data center business is the one that I'm most excited about for AMD and viia and others this segment is forecast to grow significantly over these next several years perhaps even over these next uh maybe decade or more as we get more and more use case continues to be so strong that enterprises like alphabet and Microsoft and Amazon and meta platforms etc etc keep increasing their budgets for these data centers optimized for AI they just keep increasing these budgets they did so again here in 20125 and so it's very strong for AMD so t answer the question I posed in the headline AMD is buying back their shares should investors buy their shares well I have the stock rated as a buy I certainly think so in fact I have follow over 120 150 companies and out of all of those companies that I follow I think AMD is in the top nine right now when looking at the risk versus reward at current price and current valuations of course there are significant risks but I think at the current prices the reward justifies the risk for AMD AMD stock investors in the long term