AMD STOCK ANALYSIS - Why It is Undervalued Now, Intrinsic Value Calculation!

TL;DR

AMD stock has dropped due to fund managers rotating investments, concerns about inflation, and interest rate fluctuations. This analysis covers AMD's business model, long-term growth prospects, risks, intrinsic value, and the author's perspective on buying AMD stock.

Transcript

hi everyone this victor here welcome to the intelligent investor channel i want to give you a stock analysis about amd stock today amd stock dropped as much as 12.68 year-to-date this year mainly because many large fund managers rotated their investments from growth stocks to value and cyclical stocks that are recovering from the pandemic the job i... Read More

Key Insights

• 🐿️ AMD's shift to outsourcing chip manufacturing has made the company more profitable compared to before.
• 🥺 Demand for high-performance CPUs and GPUs has increased due to the pandemic, leading to strong revenue growth.
• 🎮 Custom chips for game consoles and data center processors are significant growth catalysts for AMD.
• 🐿️ Increasing competition from Intel and Nvidia, the global chip shortage, and the adoption of ARM-based processors pose risks to AMD's market share.
• ❓ The author provides three different scenarios for AMD's intrinsic value per share, suggesting the stock may be undervalued.

Questions & Answers

Q: What factors have contributed to the drop in AMD stock?

The drop in AMD stock can be attributed to fund managers rotating investments, concerns about inflation, and expectations of higher interest rates.

Q: What is AMD's business model?

AMD generates revenue by selling CPUs and GPUs for gaming, mobile processors, professional processors, custom chips for game consoles, and processors for workstations and data centers.

Q: What are AMD's long-term growth prospects?

AMD's long-term growth prospects include increasing demand for high-performance CPUs and GPUs, revenues from custom chips for game consoles, and expanding data center processor sales.

Q: What are the major risks for AMD?

The major risks for AMD include competition from Intel and Nvidia in the CPU and GPU markets, the global chip shortage affecting supply, and the increasing adoption of ARM-based processors.

Summary & Key Takeaways

• AMD earns revenue from selling high-performance CPUs and GPUs for gaming, mobile processors, professional processors, custom-made chips for game consoles, and processors for workstations and data centers.

• The company has seen strong revenue growth, particularly in its computing and graphics business segment, driven by demand for high-performance CPUs and GPUs during the pandemic.

• AMD's long-term growth catalysts include increased demand for high-performance processors, revenues from custom chips for game consoles, and expanding data center processor sales.