Potential Entry Point for AMD at $183 per Share

3 months ago

"Now in terms of the valuation of the company, I'm being honest guys, it's starting to get extended. I told you guys the stock was dirt cheap at 2019 times earnings. Now trading almost at 50 times earnings. So this is my valuation model on AMD. I pretty much put in the current estimate for 2025, $3.90 earnings per share, and I believe we're going to take a multiple contraction from 50 times to around 35 times earnings, which would equal $513 per share. But if I did not own AMD and I'm looking for a potential entry and I want some margin of safety, I'd consider waiting for it to get down to around $183 per share."

The speaker presents an updated valuation on AMD, noting that its current valuation is high at 50 times earnings compared to a historical low, and projects a multiple contraction to 35 times earnings that could drive the price to $513 per share. He suggests that for a safer entry with margin of safety, buying AMD at around $183 per share would be more attractive, indicating a potential long-term trade opportunity.

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