Should You Buy AMD Stock Before February 4? | AMD Stock Analysis

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AMD는 2025.2.4 실적 발표를 앞두고 있으며, AI 데이터센터 시장 성장이 지속되어 AMD에도 수혜가 예상된다. 다만 엔비디아 점유율 격차가 커 AMD 성과는 상대적으로 부진하고 게이밍 부문은 전년 대비 69% 감소했다. 선행 PER 17.65배(연저점 수준)와 DCF 내재가치 180달러 대비 현재가 122달러를 근거로 저평가를 주장하며, 실적 전 매수가 유리하다고 본다.

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01. AMD will announce its quarterly financial results on February 4, 2025, after the market closes . This is puzzling investors, should they buy AMD shares before the results, after, or even buy them at all? In this video, I will answer those questions . Today , I'll also explain what investors can expect when AMD announces its quarterly results .

02. Let me share with you my views on valuation. I will use the forward price to earnings ratio and show stock , and say AMD is very much the right price for now. So, let's find out all this in this short video. Let's get started. I would like to thank right now . Okay. AMD last updated investors on October 29, 2024 .

03. At the time, the company's CEO said that they see significant growth opportunities in the data center, client, and embedded businesses in the future , driven by increasing demand for computing power . Following that report on October 29, I shared with you data points from other companies working in the artificial intelligence (AI) data center space.

04. We are receiving more and more information that the data center market optimized for artificial intelligence is still growing . And there is no end in sight to this. The end of this is not yet in sight . That happens, right ? Companies like Microsoft, Amazon, Meta Platforms, and Alphabet are forecasting to spend $40, $50, and $60 billion on capital expenditures in the next one to two years .

05. But we don't know what the situation will be like after 3, 4, 5 years . All estimates indicate that investments in this sector will continue . So this is great news for a company like AMD, but it may not be the main beneficiary of this trend . Sure, Nvidia has 80, 85, 90% market share in that field .

06. But let me explain to you that AMD is also on the rise . In their last quarter, total revenue increased 18% year-over-year and operating income increased 223% . The management team said that they achieved record revenue of $3.5 billion in the data center segment, which is 122% more than last year . So, AMD is already on the rise .

07. The problem is , AMD's performance doesn't seem to be as good as it seems, as it lags far behind Nvidia. That's it. Nvidia is the reason AMD's performance seems to be low . Nvidia is dominating this segment so aggressively , which is why investors are disappointed even though AMD has posted 122% year-over-year growth and the stock price is not able to keep up with the momentum that Nvidia is gaining .

08. This is primarily driven by their latest generation GPU, the AMD Instinct MI300X, which is heading into data centers optimized for AI. However, the downside to AMD's business is that all other segments are marginal . Their gaming division is still in trouble . It was down 69% year-on-year in the latest quarter .

09. Investors can expect it to continue like this. There are no immediate positive factors that could propel the gaming segment onto a growth path. But what investors should be hoping for is that the company is seeing incredible growth in this data center segment optimized for AI. Even if they don't take away much market share from Nvidia , the overall market will grow and that will benefit all market participants .

10. So, it's not about increasing market share. The only thing that will benefit Nvidia, at least in the next two years, is 'growth for all'. Perhaps in the long run, in the next three, five or ten years, they will have enough time to develop their software ecosystem ; They are designing software alongside hardware to counter the dominance created by Nvidia's software investments .

11. Perhaps in the long run AMD can make up for that deficit . They have already proven they can take on Nvidia . Even if it's not that close, you can narrow the gap. They can make a difference, right? They have proven it in their gaming division for PCs . AMD gaming GPUs used for gaming. They are very good.

12. I occasionally visit gaming forums and listen to discussions on message boards there. Of course, everyone knows that Nvidia is a good GPU for gaming, but AMD is no less, right? This is a good second option for gamers looking for GPUs. Given their history of making headway against Nvidia and Intel in CPUs , investors may be confident that AMD will also excel in AI data center market share , but that will take some time.

13. This will take at least 3 years . It may take even longer, or it may not happen at all . Okay. AMD's value is at an all-time low. It is trading at its cheapest price in recent years . It is trading at a forward price-to- earnings ratio (P/E ratio) of 17.65 . Looking back a year , you can see that this share price is now at its lowest.

14. But this is just one way to look at valuation . I also use a discounted cash flow model to estimate valuation . I did this for AMD. My internal share value for AMD came to $180. The current market price is 122 dollars. So whether you look at the forward PE or the DCF , it all suggests the same thing, which is that AMD stock is getting a very low price .

15. Not just at a lower price, but at a significantly lower price . To answer the question, should you buy AMD stock before or after earnings? If you follow my channel , you know that in most cases I say to invest half and half, but in some cases, when a stock is very cheap, I think it's right to buy before earnings.

16. This is also the case with AMD stock. I think the cheaper this stock is, the higher the chances of profit , which means you risk missing out on a big gain in AMD stock . Of course, there are always risks of loss , but in this case, the potential for profit seems to be greater, given the market share and growth in the AI ​​segment, as well as the data on data centers optimized for AI .

17. So, yes, I would say you can buy AMD stock ahead of earnings. With it being so cheap and the industry growing so fast , it seems like a good investment, so you should get involved . You can see here that AMD is one of my top nine stocks to buy right now. In fact, Nvidia is also one of my top nine stocks .

18. It's a great market and a great industry to invest in. I like both Nvidia and AMD, but this video is about AMD. And yes, I think you can buy AMD stock before earnings . am happy to announce that the book I wrote explaining my six-step investment approach to evaluating stocks is now available . I have provided the link in the description below.