Mindset for Money
CPA, Financial Analyst, Former Big Four Auditor
AMD looks overvalued because its price already assumes near-perfect execution. Even if revenue grows 35% a year, per Lisa Su's guidance, from $41B to about $185B by 2031, with 25% FCF margins, the $1.07T valuation is about 21x 2031 free cash flow today. At a 45% growth rate it would still be 16x, which is not cheap. Su is known for beating expectations, but expectations are now high. x.com x.com x.com x.comÂ
AMD's fundamentals are very strong, but about 50x 2028 estimated earnings is a price that cannot be normalized for any company, under an investment philosophy that may be wrong. Per PrivPubInvestor, the stock rose from $450 to almost $650 in two weeks on CPU demand, analyst price-target hikes, new partnerships and the Helios rollout. x.com x.comÂ
AMD's numbers remain mediocre, and the stock already trades at what it would earn in 2027 and beyond. @JonahLupton argues AMD is a 2027 story, when growth is expected to accelerate to 60-65% year over year. x.com x.comÂ
AMD and Intel look expensive only if agentic AI fails to accelerate CPU demand, and sell-side estimates probably do not yet capture all of that acceleration. AMD trades at 58x and Intel at 68x NTM EPS, with the sell side modeling EPS CAGRs through CY2029 of 66% and 82%. Beating CY2029 estimates of $31.50 and $4.75 by 30-40% would lift those CAGRs to about 78% and 97%. Despite frothy multiples, that EPS growth is hard to argue with. x.comÂ
AMD's valuation leaves little room for error even after stellar earnings. Sustaining 40% annual growth to 2030 gives $200B revenue and $80B net income at a 40% margin; at 20x earnings that is $1.6T, or about $990B discounted at 10%, versus $845B today. The market fears its acceleration coincides with the final stage of AI capex growth, as customers diversify from NVIDIA, a tailwind that may fade as capex growth slows after 2027. A solid hold, but new buyers should wait for a bigger decline. … Show more
AMD's stock has outrun its fundamentals, leaving it a bad investment at today's price despite an extremely bullish long-term outlook for the business. From April 2025 to September 2026, AMD rose 8x while revenue grew 55%; Nvidia rose 2.4x while revenue grew 118%. AMD had previously lagged despite improving fundamentals, but the market's catch-up went too far. Its risk/reward is no longer what it was at roughly 20x forward earnings in 2025; a crash could make it attractive again. x.com x.comÂ
AMD is held for its strong earnings growth, which, when it continues into the next quarter, is a reason to own a company beyond a good-looking chart. Price and risk then decide whether to take the trade. x.comÂ
AMD is no longer cheap after surpassing the $600 base case originally set for 2029 while it is still 2026. At a 55x forward P/E the market is paying up for its big growth, even though consistent beats and sharply raised long-term guidance show the model working and analysts likely still underestimate its earnings power. It is a hold here, not a buy. x.comÂ
AMD's $518 share price is far ahead of what it earns: less than $7 a share annualized, in the greatest earnings environment in its history. Annualizing its $11.5B quarterly revenue to $46B puts it at 18 times revenue, a 5.5% yield even if it had no taxes, employees or cost of goods and simply collected the money. x.comÂ
AMD's growth runway may be much larger than investors realize, as agentic AI drives a surge in server compute. Management now sees the server CPU market growing 35%+ annually through the decade, surpassing $120B by 2030, because AI agents mean more inference, orchestration, memory movement and server-side processing. Lisa Su reiterated the path to $20+ EPS. AMD looks like it is just getting started, though some trimming toward SoFi, Hims and Oscar is under consideration. x.com x.comÂ
AMD is trading at its highest valuation in a decade, and another comparison puts it at about three times Nvidia's valuation. x.comÂ
