Advanced Micro Devices Stock To $151?
Advanced Micro Devices (AMD) stock has fallen 12% during the past week and is currently trading at $216.00. Our multi-factor assessment suggests that it may be time to reduce exposure to AMD stock. We are primarily concerned with the current valuation, and a price of $151 may not be out of reach. We believe there is not much 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:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Very High |
| What you get: | |
| Growth | Very Strong |
| Profitability | Moderate |
| Financial Stability | Very Strong |
| Downturn Resilience | Weak |
| Operating Performance | Strong |
| Stock Opinion | Relatively Expensive |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $351 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.
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[1] Valuation Looks Very High
| AMD | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 10.1 | 3.4 |
| Price-to-Earnings Ratio | 80.8 | 24.8 |
| Price-to-Free Cash Flow Ratio | 52.0 | 21.6 |
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 14.7% over the last 3 years
- Its revenues have grown 34% from $26 Bil to $35 Bil in the last 12 months
- Also, its quarterly revenues grew 34.1% to $10 Bil in the most recent quarter from $7.7 Bil a year ago.
| AMD | S&P 500 | |
|---|---|---|
| 3-Year Average | 14.7% | 5.6% |
| Latest Twelve Months* | 34.3% | 6.4% |
| Most Recent Quarter (YoY)* | 34.1% | 7.4% |
This table highlights how AMD is growing vs broader market. For more details see: AMD Revenue Comparison
[3] Profitability Appears Moderate
- AMD last 12 month operating income was $3.7 Bil representing operating margin of 10.7%
- With cash flow margin of 22.3%, it generated nearly $7.7 Bil in operating cash flow over this period
- For the same period, AMD generated nearly $4.3 Bil in net income, suggesting net margin of about 12.5%
| AMD | S&P 500 | |
|---|---|---|
| Current Operating Margin | 10.7% | 18.8% |
| Current OCF Margin | 22.3% | 20.6% |
| Current Net Income Margin | 12.5% | 12.8% |
This table highlights how AMD profitability vs broader market. For more details see: AMD Operating Income Comparison
[4] Financial Stability Looks Very Strong
- AMD Debt was $3.8 Bil at the end of the most recent quarter, while its current Market Cap is $351 Bil. This implies Debt-to-Equity Ratio of 1.1%
- AMD Cash (including cash equivalents) makes up $11 Bil of $77 Bil in total Assets. This yields a Cash-to-Assets Ratio of 13.7%
| AMD | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 1.1% | 19.7% |
| Current Cash-to-Assets Ratio | 13.7% | 7.4% |
[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 $264.33 on 29 October 2025 , and currently trades at $216.00
| AMD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -65.4% | -25.4% |
| Time to Full Recovery | 461 days | 464 days |
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
| AMD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -34.3% | -33.9% |
| Time to Full Recovery | 128 days | 148 days |
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
| AMD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -91.2% | -56.8% |
| Time to Full Recovery | 3,556 days | 1,480 days |
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.
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