AMD: The Valuation Makes No Sense

Summary:

• AMD’s shares have dipped below $120 recently, presenting an attractive risk profile despite the creation of negative investor sentiment.
• AMD’s Data Center segment shows promising growth potential with the MI300X chip, positioning it to compete with Nvidia’s dominance in the AI GPU market.
• AMD’s valuation at a P/E ratio of 24.4X offers a 22% discount compared to Nvidia, making it an attractive buy before a potential recovery.
• AMD’s upcoming AI accelerators and burgeoning Data Center business could significantly boost revenues, gross profits, and free cash flows in FY 2025.

AMD (NASDAQ:AMD)’s shares have massively disappointed since the semiconductor company reported results for its third fiscal quarter in October. Although AMD reported a doubling of its Data Center segment revenue in the September quarter, Y/Y, a relatively modest

Analyst’s Disclosure: I/we have a beneficial long position in the shares of AMD, NVDA, INTC either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.