AMD Valuation Reflects Cautious Outlook Despite Growth Prospects

about 1 month ago

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"Now all that being said, I feel these positive prospects are mostly reflected in AMD stock price valuation. It's trading at a forward price to earnings of 46 compared to the forward price to earnings of Nvidia at 33. So AMD stock right now is trading at a valuation that's roughly 33% more expensive than Nvidia when measuring on a forward price to earnings basis. Furthermore, when I calculate the company's fair value using my proprietary discounted cash flow valuation model, the current market price at 237 is above the intrinsic value per share I calculated at 193. So regardless of the valuation metric I'm using, AMD stock looks uh either fairly valued or slightly overvalued given its current market prospects. I can understand if you already own the stock. It's a reasonable stock to hold because it's got great prospects both in the near-term and the medium-term and the longer term as I think it will continue to grow to gain more market share in this industry."

The speaker provides a detailed assessment of AMD stock, noting that despite the company's promising margins and growth in its data center segment, the stock appears fairly valued or even slightly overvalued based on its forward P/E and discounted cash flow analysis. The commentary suggests that while AMD may be a reasonable hold for current investors, it does not present a compelling buy opportunity.

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