One-glance verdict
Overvalued
$121.66 our estimate vs market $633.91
Wall Street consensus: $619.51 (409.2% higher than our fair-value estimate)
421% above our estimate, beyond the bull case
Fundamentals snapshot
Advanced Micro Devices, Inc.
AMD · NMS · Technology · Semiconductors
Current price
$633.91
52-week range
$188.22 - $645.46
Market cap
$1.03T
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
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 19.2% last year.
- Reward Returns 10.2% on equity, ahead of 16% of its peers.
- Risk Stock trades 12.2% above its 5-year average P/E.
- 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 by making various computer chips. For many years, it was known as a secondary supplier and a less expensive alternative to its main rival, Intel. A major turning point came in 2014 when Dr. Lisa Su became CEO; she focused the company on creating high-performance chips for gaming, personal computers, and data centers (large computer warehouses that power the internet). This strategy, especially with its successful Ryzen and EPYC processors, turned AMD into a major competitor and a leader in the semiconductor industry.
What it actually does
Think of AMD as a company that designs the 'brains' for many electronic devices you use. These brains, called semiconductors or chips, are essential for everything from laptops and desktop computers to gaming consoles like the PlayStation and Xbox. AMD doesn't manufacture the chips itself; instead, it designs them and hires other companies, called foundries, to build them. The company's main products are central processing units (CPUs), which handle a device's core tasks, and graphics processing units (GPUs), which create the images you see on a screen.
Data Center
This is AMD's largest and fastest-growing business, making up about half of the company's sales. It sells powerful processors, like the EPYC server chips and Instinct AI accelerators, to huge cloud providers and large enterprises that operate massive data centers. These customers use AMD's chips to power services like cloud computing (storing and accessing data over the internet), artificial intelligence (AI), and other complex business applications. This segment's growth is driven by the increasing demand for cloud services and AI technologies.
Client
The Client segment focuses on designing processors for personal computers, including desktops and laptops. You might recognize their popular brand names like Ryzen and Athlon, which are sold to major computer manufacturers such as Dell and HP, as well as directly to consumers who build their own PCs. This part of the business provides the processing power for everyday computing, from web browsing and office work to more demanding tasks like video editing. It represents a significant portion of AMD's revenue, though its sales can be cyclical (tending to rise and fall with consumer spending habits).
Gaming
This segment is well-known among video game enthusiasts. It includes AMD's Radeon graphics cards, which are crucial for high-quality gaming on PCs, and the semi-custom chips that power popular game consoles like Sony's PlayStation and Microsoft's Xbox. Essentially, if you're playing a modern video game on a console or a high-end PC, there's a good chance AMD's technology is creating the visual experience. While smaller than the Data Center and Client segments, it's a key business that showcases AMD's graphics technology leadership.
Embedded
This is a more specialized part of AMD's business that creates chips for a wide variety of electronic devices beyond computers. These 'embedded' processors are designed for specific tasks in industries like automotive, industrial machinery, healthcare, and communications. For example, an AMD embedded chip might be found in a car's infotainment system, a medical imaging machine, or a factory robot. This segment expanded significantly after AMD acquired a company called Xilinx, adding more adaptable chip technology to its portfolio.
What management is betting on now
AMD's primary focus is on the rapidly growing market for artificial intelligence (AI). The company is investing heavily in developing powerful Instinct AI accelerators to compete directly with rivals like Nvidia in the data center space, which is essential for training and running complex AI models. Management is also pushing to integrate AI capabilities into all its products, from laptops to embedded devices, creating what are known as 'AI PCs'. The strategy is to be a leader in high-performance and adaptive computing, providing the essential hardware that powers the next generation of technology.
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 $121.66 vs current price $633.91
Wall Street consensus is the average analyst price target: $619.51 (409.2% higher than our fair-value estimate).
Our most-likely fair value is $121.66 a share — about 80.8% below today's price of $633.91, 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
2 Risks
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
-
Stock trades 12.2% above its 5-year average P/E.
-
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)
156.14x
Forward P/E
40.68x
P/B
15.39x
P/S
25.05x
EV/EBITDA
107.30x
PEG ratio
0.62x
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
4.06
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