One-glance verdict
Overvalued
$135.52 our estimate vs market $477.57
Wall Street consensus: $613.84 (352.9% higher than our fair-value estimate)
252% above our estimate, beyond the bull case
Fundamentals snapshot
Advanced Micro Devices, Inc.
AMD · NMS · Technology · Semiconductors
Current price
$477.57
52-week range
$149.22 - $584.73
Market cap
$779.62B
Balance sheet
Healthy
28.20x Strong cushion
Net cash $8.84B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 19.2% last year.
- Reward Returns 10.2% on equity, ahead of 16% of its peers.
- Reward Free cash flow was positive in 8/10 years.
- Risk Insider ownership is only 0.4% (peer median: 1.9%).
What this company does
Advanced Micro Devices, Inc.
Advanced Micro Devices (AMD) designs and sells the powerful computer chips that act as the "brains" for personal computers, gaming consoles, and the massive data centers that run the internet and artificial intelligence. The company makes its money selling these processors and graphics cards to large device manufacturers like Dell and the companies behind cloud services like Amazon Web Services. Because its products are critical for major technology trends, AMD's performance often reflects the health of the PC, gaming, and AI industries.
How the company got here
Founded in 1969, Advanced Micro Devices (AMD) started as a small semiconductor company in Silicon Valley. For many years, it was known as a secondary supplier of computer chips for companies like Intel, essentially making compatible versions of their processors. A major turning point came in the late 1990s and early 2000s with the launch of its Athlon processor, which for the first time truly competed with and sometimes outperformed Intel's chips. After a challenging period, the company underwent a significant turnaround with the release of its Ryzen processors, which have been very successful in personal computers and have helped AMD gain significant market share (the portion of total sales in an industry that a particular company has).
What it actually does
AMD designs high-performance computer chips that act as the 'brains' for a huge variety of electronic devices. You can find their technology in desktop and laptop computers, the data centers (massive computer warehouses that power the internet and cloud services) that run websites and apps, and popular gaming consoles like the PlayStation and Xbox. The company doesn't actually manufacture the chips itself; it designs them and then outsources the production to specialized manufacturing partners, a business model known as 'fabless' manufacturing. AMD's main products are central processing units (CPUs), which handle general computing tasks, and graphics processing units (GPUs), which are specialized for handling complex visuals for things like video games and artificial intelligence.
Data Center
This is AMD's largest and fastest-growing business, making up nearly half of the company's sales. This division sells powerful processors, sold under the brand name EPYC, and specialized chips called Instinct accelerators to the massive companies that run cloud computing services and large corporate data centers. These customers, like Microsoft and Oracle, buy these chips to power everything from websites and corporate software to cutting-edge artificial intelligence (AI) applications. The intense computing needs of AI have created huge demand for this segment's products.
Client and Gaming
This segment combines two of AMD's well-known businesses and represents a large portion of its revenue. The 'Client' part sells its Ryzen processors to companies like Dell and HP, who use them to build the laptops and desktop computers you might buy for home or work. The 'Gaming' part includes both high-performance Radeon graphics cards that serious PC gamers buy to upgrade their computers, and the semi-custom chips that are the heart of gaming consoles like the Sony PlayStation 5 and Microsoft Xbox Series X|S.
Embedded
This is a smaller but steadily growing part of AMD's business. It provides processors and other specialized chips for a wide variety of electronic systems that aren't personal computers, such as in-car infotainment systems, networking equipment, and industrial robotics. These customers need reliable and often power-efficient chips that can be built into their own products for long periods. This business came to AMD largely through its acquisition (the buying of one company by another) of a company called Xilinx.
What management is betting on now
AMD's primary focus is on the massive opportunity in artificial intelligence (AI). The company is investing heavily to compete in the market for AI accelerators, the powerful chips needed to train and run complex AI systems, which is currently dominated by its rival, Nvidia. Management is betting that its high-performance chips for data centers will continue to be in high demand as cloud providers and businesses build out their AI infrastructure (the underlying foundation of technology needed for AI to function). The company also sees AI as a key feature for future personal computers, creating what it calls 'AI PCs' that can run AI applications directly on the device.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$496.00M
FY2024 Q4
$1.09B
FY2025 Q1
$727.00M
FY2025 Q2
$1.73B
FY2025 Q3
$1.90B
FY2025 Q4
$2.38B
FY2026 Q1
$2.57B
FY2026 Q2
$1.56B
Revenue
$11.54B
Net income
$2.30B
Diluted EPS
1.38
Operating cash flow
$2.37B
Free cash flow
$1.56B
Fetching…
Sources
Revenue
$10.25B
Net income
$1.38B
Diluted EPS
0.84
Operating cash flow
$2.96B
Free cash flow
$2.57B
Fetching…
Sources
Revenue
$10.27B
Net income
$1.51B
Diluted EPS
0.92
Operating cash flow
$2.60B
Free cash flow
$2.38B
Fetching…
Sources
Revenue
$9.25B
Net income
$1.24B
Diluted EPS
0.75
Operating cash flow
$2.16B
Free cash flow
$1.90B
Fetching…
Sources
Revenue
$7.68B
Net income
$872.00M
Diluted EPS
0.54
Operating cash flow
$2.01B
Free cash flow
$1.73B
Fetching…
Sources
Revenue
$7.44B
Net income
$709.00M
Diluted EPS
0.44
Operating cash flow
$939.00M
Free cash flow
$727.00M
Fetching…
Sources
Revenue
$7.66B
Net income
$482.00M
Diluted EPS
0.30
Operating cash flow
$1.30B
Free cash flow
$1.09B
Fetching…
Sources
Revenue
$6.82B
Net income
$771.00M
Diluted EPS
0.47
Operating cash flow
$628.00M
Free cash flow
$496.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $135.52 vs current price $477.57
Wall Street consensus is the average analyst price target: $613.84 (352.9% higher than our fair-value estimate).
Our most-likely fair value is $135.52 a share — about 71.6% below today's price of $477.57, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Healthy
Net cash $8.8B - more cash than debt. Interest coverage 28.2x.
Net debt
$-8.84B
Interest coverage
28.20x
Advanced Micro Devices, Inc.'s profit covers its interest bill about 28.2 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
AMD
BASELINE
Advanced Micro Devices, Inc.
Total debt $4.28B Interest coverage 28.20x This is the baseline the peer rows are being compared against.
Total debt $50.54B Interest coverage -0.02x -100% vs AMD This peer has almost no interest-payment cushion compared with AMD.
Total debt $38.86B Interest coverage 503.42x +1,685% vs AMD Carries about 17.9x more debt cushion than AMD.
Total debt $15.27B Interest coverage 18.67x -34% vs AMD Carries about 1.5x less debt cushion than AMD.
Total debt $59.42B Interest coverage 8.12x -71% vs AMD Carries about 3.5x less debt cushion than AMD.
Total debt $5.29B Interest coverage 6.61x -77% vs AMD Carries about 4.3x less debt cushion than AMD.
What you should know
The case for and against AMD
3 Rewards
1 Risk
Rewards
-
Revenue grew 19.2% last year.
-
Returns 10.2% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 8/10 years.
Risks
-
Insider ownership is only 0.4% (peer median: 1.9%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
121.83x
Forward P/E
30.91x
P/B
11.59x
P/S
18.87x
EV/EBITDA
80.61x
PEG ratio
0.48x
Profitability
How much profit each dollar creates
Gross margin
55.7%
Operating margin
17.2%
Net margin
15.6%
ROE
10.2%
ROA
5.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.06x
Current ratio
2.61x
Quick ratio
1.69x
Total debt
$4.28B
Total cash
$13.11B
Growth
How the business has been compounding
Revenue TTM
$41.30B
Revenue 5Y CAGR
20.5%
EPS TTM
3.92
EPS 5Y CAGR
46.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$10.08B
Free CF TTM
$6.74B
FCF margin
16.3%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
1995-04-27