Advanced Micro Devices Stock To $161?

Advanced Micro Devices (AMD) stock has jumped 43% during the past month, and is currently trading at $230.23. Our machine-driven multi-factor assessment suggests that it may be time to reduce exposure to AMD stock. We are primarily concerned current valuation and a price of $161 may not be out of reach. We believe there are only a couple of things to fear in AMD stock given its overall Strong operating performance and financial condition. But given its Very High valuation, the stock appears Relatively Expensive.

Below is our assessment:

AMD stock has jumped meaningfully recently and we currently find it relatively expensive. While this may feel like an opportunity, there is significant risk in relying on a single stock. On the other hand, there is a huge value to a broader diversified approach we take with Trefis High Quality Portfolio. Trefis works with Empirical Asset Management – a Boston area wealth manager – whose asset allocation strategies yielded positive returns during the 2008-09 period when the S&P lost more than 40%. Empirical has incorporated the Trefis HQ Portfolio in this asset allocation framework to provide clients better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.

Let’s get into details of each of the assessed factors but before that, for quick background: With $374 Bil in market cap, Advanced Micro Devices provides x86 microprocessors, chipsets, discrete and integrated GPUs, data center and professional GPUs, and development services across computing, graphics, enterprise, embedded, and semi-custom segments.

[1] Valuation Looks Very High

This table highlights how AMD is valued vs broader market. For more details see: AMD Valuation Ratios

[2] Growth Is Very Strong

• Advanced Micro Devices has seen its top line grow at an average rate of 11.7% over the last 3 years
• Its revenues have grown 27% from $23 Bil to $30 Bil in the last 12 months
• Also, its quarterly revenues grew 31.7% to $7.7 Bil in the most recent quarter from $5.8 Bil a year ago.

This table highlights how AMD is growing vs broader market. For more details see: AMD Revenue Comparison

[3] Profitability Appears Weak

• AMD last 12 month operating income was $2.5 Bil representing operating margin of 8.3%
• With cash flow margin of 16.5%, it generated nearly $4.9 Bil in operating cash flow over this period
• For the same period, AMD generated nearly $2.8 Bil in net income, suggesting net margin of about 9.6%

This table highlights how AMD profitability vs broader market. For more details see: AMD Operating Income Comparison

[4] Financial Stability Looks Strong

• AMD Debt was $3.9 Bil at the end of the most recent quarter, while its current Market Cap is $374 Bil. This implies Debt-to-Equity Ratio of 1.0%
• AMD Cash (including cash equivalents) makes up $5.9 Bil of $75 Bil in total Assets. This yields a Cash-to-Assets Ratio of 7.8%

[5] Downturn Resilience Is Weak

AMD has fared worse than the S&P 500 index during various economic downturns. We assess this based on both (a) how much the stock fell and, (b) how quickly it recovered.

2022 Inflation Shock

• AMD stock fell 65.4% from a high of $161.91 on 29 November 2021 to $55.94 on 14 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 18 January 2024
• Since then, the stock increased to a high of $240.56 on 20 October 2025 , and currently trades at $230.23

 
2020 Covid Pandemic

• AMD stock fell 34.3% from a high of $58.90 on 19 February 2020 to $38.71 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 22 July 2020

 
2008 Global Financial Crisis

• AMD stock fell 91.2% from a high of $20.35 on 1 January 2007 to $1.80 on 25 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 21 August 2018

But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, outlook changes. Read AMD Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.

The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – S&P 500, Russell, and S&P midcap. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.