AMD: Can It Go Lower?

Summary

  • The semiconductor sector has been the hardest hit out of all amid the extended selloff this year.
  • Despite its high-double-digit growth expected in the current year, with continued fundamental outperformance demonstrated in 1H22, AMD has lost close to 60% of its value since peaking in November '21.
  • The stock now trades near its all-time historical low valuation multiple of under 4x EV/sales, drawing questions to whether it could trend lower.
  • The following analysis will walk through AMD's key growth drivers, as well as its looming investment risks, and perform a sensitivity analysis on its current market value to gauge whether the implied perpetual growth aligns with the company's fundamental outlook.
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Semiconductor Maker Advanced Micro Systems Reports Quarterly Earnings

Justin Sullivan

AMD (NASDAQ:AMD) continues to trade near historical low valuations at under 4x forward EV/sales, forging new 52-week troughs. The stock has suffered from protracted losses this year in tandem with the broader market selloff, with the semiconductor sector being

AMD Valuation Analysis

AMD Valuation Sensitivity Analysis - Key Assumptions (Author)

AMD Valuation Analysis

AMD Valuation Sensitivity Analysis - Key Assumptions (Author)

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Disclosure: I/we have a beneficial long position in the shares of AMD, NVDA either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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