Advanced Micro Devices, Inc.AMD
NMS • Technology
$517.82
P/E
168.12
PEG
1.77
FCF Yield
0.8%
Rev Growth YoY
+37.8% YoY
Gross Margin
52.8%
Health Score
9/10
D/E Ratio
0.05
Confidence
MEDIUM
Business Snapshot
Advanced Micro Devices (AMD) is a semiconductor company that designs and sells central processing units (CPUs), graphics processing units (GPUs), and accelerated processing units for markets including data centers, personal computing, gaming, and embedded systems. It operates in the highly competitive semiconductor industry as a primary challenger to NVIDIA in the GPU space and Intel in the CPU space, with a growing presence in the AI accelerator market. As a large-cap company with a market capitalisation of $844.36 billion and trailing twelve-month (TTM) revenue of $37.45 billion, AMD holds significant financial scale. The company's defining characteristic is its strategic pivot toward data center and AI-accelerator products, which is driving rapid revenue growth and position it as a major player in the next wave of computing infrastructure.
Financial Health
AMD maintains a fortress balance sheet with a debt-to-equity ratio of just 0.05x, indicating minimal leverage and substantial financial flexibility. The current ratio of 2.72x signifies strong short-term liquidity, with current assets well covering short-term obligations...
Risk Assessment
- VALUATION — P/E of 168.12x is nearly 5x the sector average of 35x, meaning the stock price already discounts years of rapid future growth and leaves almost no room for disappointment.
- EARNINGS QUALITY — While 3 of 4 recent quarters beat estimates is positive, any shift lower in this beat rate would undermine confidence in guidance quality.
- REVENUE DECELERATION — Quarterly revenue contracted by -0.2% sequentially, conflicting with the 37.8% YoY growth rate and suggesting a potential pause in the recent explosive growth trajectory.
- VALUATION DIVERGENCE — The Python DCF estimate of $98.64 strongly suggests the stock is overvalued relative to a fundamental cash flow model, with the current price of $517.82 representing a very large premium.
- INSIDER — 0 insider buys vs 7 insider sells over the last 90 days is a clear signal that company executives are choosing to reduce their equity exposure at current prices....
AMD maintains a fortress balance sheet with a debt-to-equity ratio of just 0.05x, indicating minimal leverage and substantial financial flexibility. The current ratio of 2.72x signifies strong short-term liquidity, with current assets well covering short-term obligations. The company generated $6.74 billion in free cash flow over the trailing twelve months, though the free cash flow yield stands at a low 0.8% relative to its massive market capitalisation. Gross margin slipped from 54.3% to 52.8% year-over-year, while the net margin of 13.4% reflects a moderately profitable business. Overall, AMD's financial health is excellent, underpinning its ability to reinvest aggressively in R&D and capital expenditure without relying on external financing or risking dilution.
- VALUATION — P/E of 168.12x is nearly 5x the sector average of 35x, meaning the stock price already discounts years of rapid future growth and leaves almost no room for disappointment. - EARNINGS QUALITY — While 3 of 4 recent quarters beat estimates is positive, any shift lower in this beat rate would undermine confidence in guidance quality. - REVENUE DECELERATION — Quarterly revenue contracted by -0.2% sequentially, conflicting with the 37.8% YoY growth rate and suggesting a potential pause in the recent explosive growth trajectory. - VALUATION DIVERGENCE — The Python DCF estimate of $98.64 strongly suggests the stock is overvalued relative to a fundamental cash flow model, with the current price of $517.82 representing a very large premium. - INSIDER — 0 insider buys vs 7 insider sells over the last 90 days is a clear signal that company executives are choosing to reduce their equity exposure at current prices.
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