AMD (AMD): Examining Valuation After Recent Share Price Gains in the Semiconductor Sector

Advanced Micro Devices (AMD) recently saw its stock experience modest gains over the past month, supported by investor interest in semiconductor names. Shares climbed around 59% in the past month, reflecting continued momentum across the sector.

See our latest analysis for Advanced Micro Devices.

Advanced Micro Devices’ 1-day share price return of 7.6% underscores how quickly investor sentiment can shift, especially in fast-moving industries like semiconductors. This surge builds on a year-to-date share price return of over 100%, signaling strong momentum. The 1-year total shareholder return of 61.9% and even steeper multi-year gains show AMD’s longer-term performance story remains robust as the company navigates ongoing industry shifts and changing growth expectations.

If AMD’s rally has you watching the sector more closely, now’s a great chance to discover See the full list for free.

With such impressive gains on the books, the big question for investors now is whether AMD’s stock is undervalued compared to its future prospects, or if the market has already priced in all that expected growth.

Most Popular Narrative: 20.4% Overvalued

According to oscargarcia’s widely discussed narrative, the implied fair value is well below AMD’s closing price. This highlights some big expectations already factored in and sets a high bar for growth. Investors are keenly focused on whether AMD’s projected pipeline can redefine what the company is worth over the next few years.

“A successful, high-scale AI business (especially tied to a marquee client like OpenAI) could shift investor perception of AMD from ‘chip / commodity competitor’ to a leading AI infrastructure play. That might justify a higher P/E or EV/EBITDA multiple than what it trades at today.”

Read the complete narrative.

Wondering what’s driving that premium price target? The story centers on transformative partnerships and electrifying revenue projections, all underpinned by ambitious growth and margin assumptions. If you want to see which numbers push the narrative’s valuation far above the market, you should see the full breakdown.

Result: Fair Value of $210.00 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, regulatory headwinds or a resurgence from competitors like Nvidia could quickly alter AMD’s growth story and shift sentiment for investors who are watching closely.

Find out about the key risks to this Advanced Micro Devices narrative.

Another View: SWS DCF Model Puts Value Lower

While the narrative points to AMD being overvalued based on its price-to-sales ratio, our SWS DCF model also suggests the stock is trading above its fair value. The DCF points to a fair value of $165.73 compared to the current market price, offering another cautionary perspective for investors. Will the future growth live up to these high expectations, or is the stock running ahead of itself?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Advanced Micro Devices Narrative

If you see the numbers differently or want to dig into the details yourself, you can craft your own narrative and analysis in just a few minutes: Do it your way

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Advanced Micro Devices.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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