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
7/10
D/E Ratio
0.05
Confidence
LOW
Business Snapshot
Advanced Micro Devices designs and markets high-performance computing and graphics products, primarily CPUs and GPUs for data center, PC, and embedded markets. The company operates in the semiconductor industry, competing directly with Intel in CPUs and NVIDIA in GPUs, where it has established itself as a challenger with significant market share gains in recent years. As a large-cap company with a market capitalisation of $844.36B, AMD has substantial financial scale, generating $37.45B in trailing twelve-month revenue. A defining characteristic of AMD is its strong product cycle momentum, driven by its data center GPU and CPU architecture, which has been a primary catalyst for its rapid revenue growth.
Financial Health
AMD's gross margin of 52.8% is healthy but shows a slight contraction from the prior year's 54.3%, while its net margin of 13.4% reflects solid operating profitability. The balance sheet is a significant strength, featuring a very low debt-to-equity ratio of 0.05x and a strong current ratio of 2.72x, indicating a fortress-like liquidity position with minimal leverage...
Risk Assessment
- VALUATION — P/E of 168.12x is nearly 5x the semiconductor sector average of 35x, an extreme premium that leaves little room for execution missteps.
- EARNINGS QUALITY — The company beat estimates in 3 of the last 4 quarters, which is a positive signal and does not present a credibility risk.
- REVENUE DECELERATION — QoQ revenue growth of -0.2% contrasts sharply with the 37.8% YoY growth, indicating a possible short-term demand pause or cyclical slowdown.
- 52-WEEK POSITION — The current price of $517.82 is below the midpoint of the 52-week range ($584.73 and $133.50, midpoint ~$359.12), and is approximately 11% off its 52-week high of $584.73.
- VALUATION DIVERGENCE — The Python DCF estimate of $98.64 implies a stock price significantly above its modelled intrinsic value, placing a high burden of proof on future growth to justify the current valuation.
- TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed....
AMD's gross margin of 52.8% is healthy but shows a slight contraction from the prior year's 54.3%, while its net margin of 13.4% reflects solid operating profitability. The balance sheet is a significant strength, featuring a very low debt-to-equity ratio of 0.05x and a strong current ratio of 2.72x, indicating a fortress-like liquidity position with minimal leverage. Free cash flow is robust at $6.74B, though the corresponding FCF yield of 0.8% is low, suggesting the market has already priced in this cash generation. Overall, AMD is highly solvent and cash-generative, providing ample capacity for reinvestment in R&D, strategic acquisitions, and potential shareholder returns without risk of dilution.
- VALUATION — P/E of 168.12x is nearly 5x the semiconductor sector average of 35x, an extreme premium that leaves little room for execution missteps. - EARNINGS QUALITY — The company beat estimates in 3 of the last 4 quarters, which is a positive signal and does not present a credibility risk. - REVENUE DECELERATION — QoQ revenue growth of -0.2% contrasts sharply with the 37.8% YoY growth, indicating a possible short-term demand pause or cyclical slowdown. - 52-WEEK POSITION — The current price of $517.82 is below the midpoint of the 52-week range ($584.73 and $133.50, midpoint ~$359.12), and is approximately 11% off its 52-week high of $584.73. - VALUATION DIVERGENCE — The Python DCF estimate of $98.64 implies a stock price significantly above its modelled intrinsic value, placing a high burden of proof on future growth to justify the current valuation. - TECHNICALS — RSI, MACD, and moving average data unavailable for this period; momentum cannot be independently confirmed.
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