Shares of Advanced Micro Devices (AMD) have gained 80% and 150% in 2018 and 2019, respectively. But AMD’s actual financials have not nearly arrived on the same order.
The market has priced in a momentum factor which is from the expectation of AMD’s ability to gain meaningful CPU market shares in the near future.
For a momentum stock, AMD investors tend to overweight future distant revenue, or future market share gains.
At $46, AMD share is mildly overvalued by $3 after the momentum being considered.
If the price premium is a result of positive sentiment, AMD sentiment value tends to reverse itself in 2-3 weeks.
Shares of Advanced Micro Devices (NASDAQ:AMD) have gained 80% and 150% in 2018 and 2019, respectively, where company's actual fundamentals have not nearly arrived on the same order. Such discrepancy may imply that