AMD Stock Prediction 2025 (Updated) – Big Move Coming?

00:08:05
https://www.youtube.com/watch?v=IwHjalWtGtQ

概要

TLDRThe video discusses AMD's recent decline in stock performance, noting it has dropped over 8% recently and around 35% in the past year. Analysts are wary of the company's data center business not performing as well as expected and the rising competition from Intel and Arm. Although AMD's earnings remain strong and it has favorable growth projections, there are widespread concerns about its competitive landscape. An updated DCF valuation calculates a potential stock price of $137, indicating possible upside based on varying growth assumptions. Analysts recommend caution but note potential for future recovery.

収穫

  • 📉 AMD is down over 8% and 35% over the past year.
  • 📉 Concerns over data center business performance.
  • 💼 Analysts suggest AMD is facing tough competition from Intel and Arm.
  • 📈 Expected EPS growth is 43% over the next 3-5 years.
  • 💵 Updated valuation suggests a stock price of $137 with potential upside.
  • 🏦 Wall Street considers AMD a buy despite challenges.

タイムライン

  • 00:00:00 - 00:08:05

    The stock market has seen mixed performances, with some stocks like Uber up 28% and others like AMD down over 8%. AMD's performance has been particularly poor, being down about 35% over the last year and trading close to its 52-week low. Both Wall Street and Seeking Alpha rate AMD as a buy, but analysts warn of significant challenges in the data center segment and competition from Intel and Arm CPUs. AMD's Q4 results showed revenue below expectations, raising concerns about slowing growth in its core business, despite strong earnings projections for the future.

マインドマップ

ビデオQ&A

  • What is AMD's current stock performance?

    AMD is down over 8% recently and around 35% over the past year.

  • Why are analysts cautious about AMD?

    Analysts are concerned about AMD's data center business and competition from Intel and Arm.

  • What is the projected EPS growth for AMD?

    Earnings per share for AMD are anticipated to grow at 43% over the next 3 to 5 years.

  • What is AMD's valuation based on DCF?

    The updated valuation for AMD suggests a price of $137 based on a 25% growth rate.

  • What are the potential risks for AMD?

    AMD faces competition from Intel and Arm in the server CPU market.

  • Is AMD considered a buy by Wall Street?

    Yes, both Wall Street and Seeking Alpha consider AMD a buy.

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  • 00:00:00
    year today in the stock market we have
  • 00:00:02
    seen some stocks like uber perform very
  • 00:00:05
    strongly up 28% but also other stocks
  • 00:00:08
    like Tesla down 17 and our focus is
  • 00:00:11
    going to be on AMD which continues to be
  • 00:00:14
    in a downward Trend down over 8% and one
  • 00:00:17
    of the worst performing in the
  • 00:00:19
    semiconductor space now we're going to
  • 00:00:21
    run through our updated valuation based
  • 00:00:23
    on the earnings to understand if there's
  • 00:00:25
    a company to buy or one to avoid and we
  • 00:00:28
    also want to flag it hasn't had the
  • 00:00:30
    great last 12 months down around 35%
  • 00:00:33
    losing more than 1third of their market
  • 00:00:36
    capitalization and isn't trading that
  • 00:00:38
    far off their 52- we low having said
  • 00:00:41
    that both Wall Street and Seeking Alpha
  • 00:00:43
    do consider this company a buy however
  • 00:00:45
    AMD does face according to this analyst
  • 00:00:48
    a double threat for 2025 and when we
  • 00:00:51
    take a look the main reason is in fact
  • 00:00:53
    the company specific related to the data
  • 00:00:56
    center business isn't looking as strong
  • 00:00:58
    as the analyst wanted and on a previous
  • 00:01:00
    episode we have in fact covered the
  • 00:01:03
    amount of downgrades this company has
  • 00:01:04
    had at least 10 were covered so do check
  • 00:01:07
    that out if you want to see the
  • 00:01:09
    specifics but we can see the data
  • 00:01:11
    Revenue did come in at 3.86 billion the
  • 00:01:14
    market wanted 4.14 and that is quite
  • 00:01:17
    some way away and ultimately analysts
  • 00:01:19
    are worried that the strong growth we
  • 00:01:21
    have seen in amd's core x86 franchise is
  • 00:01:25
    starting to slow down and in fact
  • 00:01:27
    perhaps Intel is gaining some market
  • 00:01:29
    share that isn't the only issue as we
  • 00:01:32
    said a double threat that AMD does face
  • 00:01:34
    but there is another one from arm in the
  • 00:01:37
    server CPU market and as we can see
  • 00:01:39
    Microsoft and Nvidia have designed Arm
  • 00:01:42
    based serice CPUs for their own cloud
  • 00:01:45
    data centers that is increasingly taking
  • 00:01:47
    share away from their x86 based chips
  • 00:01:50
    made by AMD and Intel and it also goes
  • 00:01:53
    on to mention that potentially it isn't
  • 00:01:55
    just an issue we are seeing on the
  • 00:01:57
    server side but also Nvidia could be
  • 00:02:00
    about to make an armb CPU for Consumer
  • 00:02:03
    Windows laptops which would further
  • 00:02:05
    amd's client business as we said
  • 00:02:08
    though this is one that analysts are all
  • 00:02:10
    in agreement that they believe this
  • 00:02:12
    company is only going to continue to
  • 00:02:13
    suffer from the competition it fa is
  • 00:02:16
    like Intel like Nvidia yet having said
  • 00:02:18
    that their earnings continue to be very
  • 00:02:20
    strong they've out formed or at least
  • 00:02:22
    been in line over the last four and over
  • 00:02:25
    the next four quarters they do
  • 00:02:26
    anticipate double digit growth to the
  • 00:02:28
    earnings per share and right now believe
  • 00:02:30
    it or not based on the EPS for the full
  • 00:02:33
    year this company is trading at 23.3 on
  • 00:02:36
    a forward P looking basis which on the
  • 00:02:39
    face of it does look very good the
  • 00:02:41
    sector itself sits around 26 so you're
  • 00:02:43
    paying right now a discount to the
  • 00:02:45
    median of around 99.3% but you're also
  • 00:02:48
    getting around a 45% discount to what
  • 00:02:51
    AMD historically trades for around
  • 00:02:54
    41.95 and there are some considerations
  • 00:02:57
    we need to think about AMD in the
  • 00:02:59
    whether or not over the long term it can
  • 00:03:01
    continue to outform the S&P like we've
  • 00:03:03
    seen over the last 10 years not too long
  • 00:03:06
    ago we noticed Lisa sue the co discussed
  • 00:03:09
    dat centers in specific having a very
  • 00:03:11
    large potential compounded annual growth
  • 00:03:13
    rate of 60% at least until 2028 and this
  • 00:03:16
    is the one segment that will be very
  • 00:03:18
    closely looked at at least over the next
  • 00:03:20
    few quarters one that we just heard
  • 00:03:22
    analysts were disappointed in for their
  • 00:03:24
    Q4 however we can see nonetheless up 69%
  • 00:03:28
    year onye and we also noticed their
  • 00:03:30
    operating income was up around double
  • 00:03:33
    from the same quarter in 2023 so whilst
  • 00:03:36
    it did come under analyst expectations
  • 00:03:38
    we are still noting a lot of growth and
  • 00:03:40
    on top of that in particular to the
  • 00:03:42
    growth grade where they get an A the
  • 00:03:44
    earnings per share of this company is
  • 00:03:46
    anticipated to grow at 43% over the next
  • 00:03:49
    3 to 5 years which is not only
  • 00:03:51
    significantly above the sector
  • 00:03:52
    comparative of 15% but also
  • 00:03:55
    significantly above their own 5year
  • 00:03:57
    average of 33% now we're going to jump
  • 00:04:00
    into our updated valuation as we
  • 00:04:02
    mentioned for AMD but before we get to
  • 00:04:04
    that we just want to highlight we have
  • 00:04:06
    released our latest freew weekly article
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    we drop one every single Monday morning
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    where we cover severely undervalued
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    stocks as well as what's going in the
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    market over the last few days so click
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    below you can sign up read straight away
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    where you'll also be able to gain access
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    to 45 undervalued stocks for the month
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    of February lots of information for each
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    see over the next year and you can grab
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    a copy of 43 stocks that Wall Street
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    themselves believe have the most upside
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    in the S&P right now so click below you
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    can sign up and read straight away now
  • 00:04:39
    we want to talk about how we got to
  • 00:04:41
    $137 which is essentially derived from
  • 00:04:43
    the DCF model now we have here the free
  • 00:04:46
    cash flow year on-ear their latest
  • 00:04:47
    earnings showing the 2024 amount at 2.4
  • 00:04:50
    billion and average growth we can't
  • 00:04:52
    ignore it for today's episode as it does
  • 00:04:54
    go from positive to negative over the
  • 00:04:56
    last 10 making it quite inconsistent now
  • 00:04:59
    25% is what we are looking at today
  • 00:05:01
    which has been lowered from the previous
  • 00:05:02
    episodes of 30% but we have both numbers
  • 00:05:05
    which we will run through for those that
  • 00:05:06
    believe slightly higher is more
  • 00:05:08
    appropriate but as you can see low
  • 00:05:10
    medium and high as well as Bloomberg
  • 00:05:12
    which we'll cover these numbers as
  • 00:05:14
    always are very subjective and you can
  • 00:05:16
    grab a copy of this model by clicking on
  • 00:05:18
    the pin comment below running through
  • 00:05:20
    your own numbers whether it's for AMD or
  • 00:05:22
    any others but based on 25% with the
  • 00:05:24
    discount rate then we get the present
  • 00:05:26
    value of future free cash flows add
  • 00:05:28
    together with the cash subtract toal
  • 00:05:30
    debt get to the equity value divide by
  • 00:05:31
    the shares outstanding and as you can
  • 00:05:33
    see
  • 00:05:34
    $137 which indicates 23% upside now if
  • 00:05:38
    you do believe that is way too
  • 00:05:39
    optimistic then we can show you for full
  • 00:05:41
    transparency the 20% rate which would be
  • 00:05:44
    $98 which would mean downside of 12% we
  • 00:05:47
    do also want to use the high rate of 30%
  • 00:05:49
    because we also believe in today's
  • 00:05:51
    episode You could argue the 25 or in
  • 00:05:53
    fact 30 and you can see that would come
  • 00:05:55
    to
  • 00:05:56
    $190 indicating 71% now we always have
  • 00:06:00
    this Bloomberg figure here it is to
  • 00:06:01
    remind ourselves that Bloomberg a few
  • 00:06:03
    years ago believed that the generative
  • 00:06:05
    AI industry could be worth around $13
  • 00:06:07
    trillion where they saw growth at around
  • 00:06:10
    42% on a companded annual growth rate at
  • 00:06:13
    least over the next 10 years whil also
  • 00:06:15
    adding the software Revenue would
  • 00:06:17
    benefit significantly with around 280
  • 00:06:19
    billion in terms of demand and therefore
  • 00:06:22
    when we do input the 42% we get to $41
  • 00:06:25
    indicating 261 upside that is more than
  • 00:06:28
    a 3X from the current price now we're
  • 00:06:30
    going to go through two of them today
  • 00:06:32
    we're going to use both the medium and
  • 00:06:33
    the high so if we start off with the
  • 00:06:35
    medium at 25% we aren't just done yet
  • 00:06:37
    because we do like to add a margin of
  • 00:06:39
    safety at 10% execute on that if it
  • 00:06:41
    meets our three golden criteria wide Mo
  • 00:06:44
    strong financial metrics good
  • 00:06:46
    forward-looking data where if you do
  • 00:06:47
    believe that in today's episode a buy
  • 00:06:50
    the
  • 00:06:50
    $123 and we keep going till it's near
  • 00:06:53
    the current trading price right now then
  • 00:06:55
    around the current value of $110 we see
  • 00:06:58
    20% MOS again a reminder based on 25%
  • 00:07:02
    growth to the free cash flow and will
  • 00:07:03
    see themselves believe this company over
  • 00:07:05
    the next year will hit around the $148
  • 00:07:08
    mark which translates to 33% upside now
  • 00:07:11
    as we said you could argue either the
  • 00:07:13
    25% rate or the 30% which we will use
  • 00:07:16
    again just to show you the difference
  • 00:07:17
    between the two as we've highlighted a
  • 00:07:20
    $190 intrinsic value and when we do run
  • 00:07:23
    it through the margin of safety no
  • 00:07:24
    surprises it will be a lot higher than
  • 00:07:26
    the previous figure you are getting at
  • 00:07:28
    least 40% around around the
  • 00:07:30
    $114 Mark and as we said Wall Street 33%
  • 00:07:34
    upside so give us your thoughts whether
  • 00:07:35
    or not in fact you believe 25% to be
  • 00:07:37
    more appropriate 30% or in fact 20% at
  • 00:07:40
    the lower growth rate and whether you're
  • 00:07:42
    buying holding or selling this company
  • 00:07:44
    you could believe a lot of growth over
  • 00:07:46
    the longer term or maybe one with a bit
  • 00:07:48
    more shortterm pain don't forget to sign
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    up to the free Weekly News data grab
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    those spreadsheets come and join us in
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    the patreon where we do cover our weekly
  • 00:07:55
    buys and sells we have been making some
  • 00:07:57
    movements in the portfolio given the
  • 00:07:59
    volatility over the last few weeks and
  • 00:08:01
    as always have a great day we'll see you
  • 00:08:03
    all on the next one
タグ
  • AMD
  • stock market
  • valuation
  • semiconductors
  • earnings
  • analysts
  • competition
  • stock performance
  • investments
  • growth rate