AMD: This Dip Is A Gift

(12min)

Summary

  • I reiterate my "Strong Buy" rating for AMD, citing massive undervaluation and strong growth prospects in AI and data center markets despite recent stock underperformance.
  • AMD's Q4 revenue of ~$7.6 billion and EPS of $1.09 beat expectations, driven by significant growth in the data center segment.
  • The potential $800 million tariff-related charge is manageable, with AMD's diversification and strong AI and server market positioning mitigating long-term risks.
  • Even under bearish scenarios, AMD is at least 25% undervalued, with potential upside of 70-75% as market conditions stabilize.
  • Given all of the above, I don't call back my "Strong Buy" for AMD today.

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Richard Drury

Intro & Thesis

My first article on Advanced Micro Devices (NASDAQ:AMD) came out in late August 2023 with a "Sell" rating. I argued at the time that AMD was supposed to fall because of its "over-diversification" and the impact

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This article was written by

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Daniel Sereda is chief investment analyst at a family office whose investments span continents and diverse asset classes. This requires him to navigate through a plethora of information on a daily basis. His expertise is in filtering this wealth of data to extract the most critical ideas. He runs the investing group Beyond the Wall Investing in which he provides access to the same information that institutional market participants prioritize in their analysis. Learn more.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of AMD 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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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