Luca - Cryptic Trades
Markets Researcher at Cryptic Trades
AMD's strong fundamentals are now clearly reflected in the price, so risk/reward no longer favors buyers after the stock became overextended. The opportunity is not what it was last year in the low $100s. This is not necessarily a call for a major top, but Chinese equities, crypto and healthcare, still in high-timeframe accumulation ranges, look like better opportunities. Off-exchange short interest in AMD is around 50%, a sign institutions are hedging their spot exposure. x.com x.comÂ
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'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 is seeing the largest institutional accumulation campaign ever in the stock, which favors further upside. It drew $1T in buy volume last quarter, larger than when the stock was at $200 or $100, and the daily chart shows clear institutional buying through the end of June. It is now forming an inside bar while holding support, with an inefficiently open area on the monthly chart. x.comÂ
AMD is too overvalued for the current market risk, even after good earnings, and its fundamentals will take time to catch up to the valuation, meaning a period of stagnation. Per Wall St Engine, Q2 revenue rose 50% to $11.5B with data center sales up 107%, and Q3 revenue guidance of about $13.0B topped estimates. x.com x.com x.com 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
Skipping AMD's dip would be a mistake given broad analyst buy support on Stock Analysis. Its snapshot shows 39 Strong Buy and five Buy ratings among 55 analysts while shares are down 6%. x.comÂ
AMD is the textbook example of a stock with too much priced into its valuation: it delivered flawless earnings and still sold off. x.comÂ
AMD looks likely to fall after its May 5 earnings, as it has risen on earnings only once in the last nine reports and dropped from $240 to $192 after the last one. The long-term growth outlook is fine, and AMD has outperformed Nvidia from around $100, but chasing it near $300 makes no sense. x.com x.com x.com x.comÂ
AMD should climb higher in time, but the stock is running ahead of its execution for now. With no clear view of near-term direction, cutting exposure is pure risk management. x.com x.com 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
