Stock Analysis

Is It Too Late To Consider Buying Advanced Micro Devices, Inc. (NASDAQ:AMD)?

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Advanced Micro Devices, Inc. (NASDAQ:AMD) led the NASDAQGS gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s take a look at Advanced Micro Devices’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Advanced Micro Devices

What's The Opportunity In Advanced Micro Devices?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.0% below my intrinsic value, which means if you buy Advanced Micro Devices today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $87.01, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Advanced Micro Devices’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Advanced Micro Devices generate?

NasdaqGS:AMD Earnings and Revenue Growth March 13th 2023

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Advanced Micro Devices' earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? AMD’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on AMD, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

So while earnings quality is important, it's equally important to consider the risks facing Advanced Micro Devices at this point in time. At Simply Wall St, we found 1 warning sign for Advanced Micro Devices and we think they deserve your attention.

If you are no longer interested in Advanced Micro Devices, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

What are the risks and opportunities for Advanced Micro Devices?

Advanced Micro Devices, Inc. operates as a semiconductor company worldwide.

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  • Earnings are forecast to grow 29.59% per year


  • Profit margins (5.6%) are lower than last year (19.1%)

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