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Infrastructure adoption and product execution keep revenue and earnings elevated while operating leverage approaches the FY2030 target.
Demand falls below the FY2027 low revenue reference, preventing the margin and cash-flow conversion required by the valuation.
Material downside could grow if revenue or earnings fall toward the lower forecast ranges, or if operating cash falls below the current $1.78 per dollar of earnings. These are warning signs to watch, not automatic reasons to sell. The price was $469.46 when this report was prepared. Fair value is $806.24. Potential value is $1,085.83. The rating is Strong Buy.235
Material downside could grow if revenue or earnings fall toward the lower forecast ranges, or if operating cash falls below the current $1.78 per dollar of earnings. These are warning signs to watch, not automatic reasons to sell. The price was $469.46 when this report was prepared. Fair value is $806.24. Potential value is $1,085.83. The rating is Strong Buy.235
Fair value is USD 806.24 versus a USD 469.46 market price, supporting the Strong Buy rating.3
Market expectations place FY2027 revenue at USD 87.34 billion on average, conditional on infrastructure demand continuing. The reference was as of and retrieved 2026-08-20.2
Material downside risks remain; the rating is Strong Buy.
Advanced Micro Devices, Inc. operates as a semiconductor company internationally. It operates in three segments: Data Center, Client and Gaming, and Embedded. The company offers artificial intelligence (AI) accelerators, microprocessors, and graphics processing units (GPUs) as standalone devices or as incorporated into accelerated processing units, chipsets, and data center and professional GPUs; and embedded processors and semi-custom system-on-chip (SoC) products, microprocessor and SoC development services and technology, data processing units, field programmable gate arrays (FPGA), system on modules, AI network interface cards, and adaptive SoC products. It provides processors under the AMD Ryzen, AMD Ryzen AI, AMD Ryzen PRO, AMD Ryzen Threadripper, AMD Ryzen Threadripper PRO, AMD Athlon, and AMD PRO A-Series brands; graphics under the AMD Radeon graphics and AMD Embedded Radeon graphics; professional graphics under the AMD Radeon Pro graphics brand; and AI and general-purpose compute infrastructure for hyperscale providers. The company offers data center graphics under the AMD Instinct accelerators and Radeon PRO V-series brands; server microprocessors under the AMD EPYC brand; low power solutions under the AMD Athlon, AMD Geode, AMD Ryzen, AMD EPYC, and AMD R-Series and G-Series brands; FPGA products under the Virtex-6, Virtex-7, Virtex UltraScale+, Kintex-7, Kintex UltraScale, Kintex UltraScale+, Artix-7, Artix UltraScale+, Spartan-6, and Spartan-7 brands; adaptive SOCs under the Zynq-7000, Zynq UltraScale+ MPSoC, Zynq UltraScale+ RFSoCs, Versal HBM, Versal Premium, Versal Prime, Versal AI Core, Versal AI Edge, Vitis, and Vivado brands; and compute and network acceleration board products under the Alveo and Pensando brands. It serves original equipment and design manufacturers, public cloud service providers, system integrators, distributors, and add-in-board manufacturers. The company was incorporated in 1969 and is headquartered in Santa Clara, California.
At USD 469.46 on 2026-08-20, the bear path is USD 296.40, a -36.9% return. This is the lower cash-flow outcome for the 2026-08-21 valuation.
Moat rated narrow from one evidenced structural source: intangible assets. Returns on capital are unknown, which sets how much of that structure is currently realised.
Economic profit is supported when reported returns exceed the company cost-of-capital hurdle.
Unavailable
The highlighted base cell exactly reruns each positively weighted calculated model at its published base assumptions and sums the weighted contributions ($806.24).
The cash-flow model remains positive in the first forecast year. The result is most sensitive to investment needs, margins, discount rates, and the value after the forecast period.
Monitor earnings quality, guidance, and valuation-sensitive operating metrics.
Monitor earnings quality, guidance, and valuation-sensitive operating metrics.
Monitor earnings quality, guidance, and valuation-sensitive operating metrics.
The industry benchmark indicates capital spending above depreciation and a modest capital-spending share of revenue. Its as-of and retrieval dates are not established, so the phase is tentative. The cycle view is demand-led and evidence-limited; forward expectations should not be treated as proof that capacity or demand has already expanded.2
Market expectations place FY2027 revenue at USD 87.34 billion on average, conditional on infrastructure demand continuing. The reference was as of and retrieved 2026-08-20.
The FY2027 revenue reference falls to USD 61.26 billion at its low end. Faster demand normalization or weak pricing would impair earnings conversion.
Build the position in stages while the Strong Buy rating remains supported. Pause new purchases if a documented review checkpoint or thesis-break trigger is breached. Review checkpoints: Cash conversion — below 0.8; Forward earnings multiple — 18 times or less.25
Reassess or exit if the core thesis breaks.
Fair value is USD 806.24 versus a USD 469.46 market price, supporting the Strong Buy rating.3
FY2025 free cash flow of USD 6.74 billion and a 1.7783 cash-conversion ratio show a plausible earnings-to-cash path.4
Use staged purchases because FY2027 revenue and earnings expectations remain unusually wide.2
At the $469.46 closing price dated 2026-08-20, Fair value is $806.24 and Potential value is $1,085.83. The rating is Strong Buy. Build the position in stages.3
Upside case: Use staged purchases because FY2027 revenue and earnings expectations remain unusually wide. Downside case: Fair value is USD 806.24 versus a USD 469.46 market price, supporting the Strong Buy rating. Horizon: Through FY2030, with quarterly operating checkpoints..
Capture your own thesis, position size, and follow-up questions. Stays on this device, only you can see it.
The records this analysis drew on, as they stood when it was run.
The bear case moves toward the lower forecast range described in this dedicated section.
FY2027 revenue below USD 61.26 billion shifts demand-sensitive earnings lower; forward estimate reference as of and retrieved 2026-08-20.2
Adjusted operating margin below 35% by FY2030 breaks expected operating leverage.25
FY2025 operating cash flow to net income falling below 0.8, from 1.7783, weakens cash-flow value.
A forward earnings multiple of 18 times or less, versus 30.295 times on 2026-08-20, compresses value.3
The five developments that would weaken our investment case.
A slowdown in hyperscaler compute infrastructure deployment would constrict top-line volume growth, constraining capital reinvestment and preventing the operational scale needed to achieve projected free cash flow generation.
Current:Revenue was $34.64B for the period ended 2025-12-27.
Alert ifFalls below USD 61.26 billion in FY2027
Subdued data center platform adoption and pricing compression reduce bottom-line profitability, curtailing earnings expansion and undermining market confidence in long-term earnings power.
Current:Diluted EPS was 2.65 for the period ended 2025-12-27.
Alert ifFalls below USD 10.77 in FY2027
Failure to achieve anticipated manufacturing efficiencies and high-margin product mix shifts breaks projected operational leverage, limiting structural margin expansion across competitive compute segments.
Current:Operating margin was 10.7% for the period ended 2025-12-27.
Alert ifFalls below 35% by FY2030
Severe working capital absorption or aggressive revenue accruals diminish cash collection quality relative to reported profits, limiting internally funded expansion capital and weakening liquid balance sheet support.
Current:Operating cash flow was 1.7783 times net income for the fiscal period ended 2025-12-27.
Alert ifFalls below 0.8 for any fiscal year
Broad industry derating or diminished structural growth confidence contracts market multiples, driving valuation compression that offsets underlying operational progress and limits equity capital appreciation.
Current:Forward earnings multiple was 30.295 times on 2026-08-20.
Alert ifCompresses to 18 times or less over the valuation period
Each lens answers a different valuation question. Only included lenses set Fair value; floors and diagnostics provide context.
Project SBC-adjusted EPS, discount each year's earnings at cost of equity, then add a Gordon-growth terminal value.
Project EPS through the explicit advantage period, fade growth as competition catches up, and discount the full stream at cost of equity.
Apply a terminal P/E to the dated forward EPS path, then discount that future share value back to the analysis date.
Convert the revenue and margin path into after-tax free cash flow, discount the annual per-share amounts and at , then adjust for signed per current share.
Multiply the peer median PEG by this stock's forecast growth to derive an implied forward P/E, then apply it to forward EPS.
Solve for the growth rate that makes the model value equal the report-date share price.
The bull case moves toward the upper forecast range and tests the report's Potential value.
The base case uses the dated estimates and documented longer-term growth forecast. The report's Fair value remains the central investment conclusion.
Monitor earnings quality, guidance, and valuation-sensitive operating metrics.
Warning level: Falls below USD 61.26 billion in FY2027. A slowdown in hyperscaler compute infrastructure deployment would constrict top-line volume growth, constraining capital reinvestment and preventing the operational scale needed to achieve projected free cash flow generation.
Warning level: Falls below USD 10.77 in FY2027. Subdued data center platform adoption and pricing compression reduce bottom-line profitability, curtailing earnings expansion and undermining market confidence in long-term earnings power.
Warning level: Falls below 35% by FY2030. Failure to achieve anticipated manufacturing efficiencies and high-margin product mix shifts breaks projected operational leverage, limiting structural margin expansion across competitive compute segments.
Warning level: Falls below 0.8 for any fiscal year. Severe working capital absorption or aggressive revenue accruals diminish cash collection quality relative to reported profits, limiting internally funded expansion capital and weakening liquid balance sheet support.
Warning level: Compresses to 18 times or less over the valuation period. Broad industry derating or diminished structural growth confidence contracts market multiples, driving valuation compression that offsets underlying operational progress and limits equity capital appreciation.
| $16.43B |
| $23.60B |
| $22.68B |
| $25.79B |
| $34.64B |
| +20.5% |
| Gross profit | $7.93B | $10.60B | $10.46B | $12.73B | $17.15B | +21.3% |
| Operating income | $3.65B | $1.26B | $401.0M | $1.90B | $3.69B | +0.3% |
| Net income | $3.16B | $1.32B | $854.0M | $1.64B | $4.34B | +8.2% |
| EPS (diluted) | $2.57 | $0.84 | $0.53 | $1.00 | $2.65 | +0.8% |
| EBITDA | $4.11B | $5.53B | $4.05B | $5.15B | $7.28B | +15.3% |
| R&D | $2.85B | $5.01B | $5.87B | $6.46B | $8.09B | +29.9% |
| SG&A | $1.45B | $2.34B | $2.32B | $2.74B | $4.14B | +30.1% |
Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.
| Revenue | $34,639,000,000 |
|---|---|
| Cost of revenue | $17,487,000,000 |
| Gross profit | $17,152,000,000 |
| Operating expenses | $13,458,000,000 |
| Operating income | $3,694,000,000 |
| Non-operating items and tax | $641,000,000 |
| Net income | $4,335,000,000 |
| Total assets | $76,926,000,000 |
|---|---|
| Cash | $5,539,000,000 |
| Current assets | $26,947,000,000 |
| Total liabilities | $13,927,000,000 |
| Current liabilities | $9,455,000,000 |
| Shareholders’ equity | $62,999,000,000 |
Point-in-time financial data used in the 2026-08-21 analysis.
| Period | Revenue | EBITDA | Net income | Operating cash flow | Free cash flow | Capex | Depreciation and amortization | Stock-based compensation | Share repurchases | Dividends paid | Net debt issuance | Investing cash flow | Financing cash flow | Beginning cash | Ending cash | Cash and investments | Total debt | Operating margin | ROIC | WACC | ROIC − WACC spread |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2016-12-31 | $4.3B | -$219M | -$498M | $81M | $4M | $77M | $133M | $86M | — | — | — | — | — | — | — | $1.3B | $1.4B | -8.6% | — | — | — |
| 2017-12-30 | $5.3B | $307M | -$33M | $12M | -$101M | $113M | $144M | $97M | — | — | — | — | — | — | — | $1.2B | $1.4B | 2.4% | — | — | — |
| 2018-12-29 | $6.5B | $659M | $337M | $34M | -$129M | $163M | $170M | $137M | — | — | — | — | — | — | — | $1.1B | $1.3B | 7.0% | — | 10.3% | — |
| 2019-12-28 | $6.7B | $919M | $341M | $493M | $276M | $217M | $222M | $197M | $0 | — | — | — | — | — | — | $1.5B | $486M | 9.4% | — | 10.2% | — |
| 2020-12-26 | $9.8B | $1.7B | $2.5B | $1.1B | $777M | $294M | — | $274M | $0 | — | — | — | — | — | — | $2.3B | $330M | 14.0% | — | 7.1% | — |
| 2021-12-25 | $16.4B | $4.1B | $3.2B | $3.5B | $3.2B | $301M | — | $379M | $1.8B | — | — | — | — | — | — | $3.6B | $1M | 22.2% | — | 7.2% | — |
| 2022-12-31 | $23.6B | $5.5B | $1.3B | $3.6B | $3.1B | $450M | $4.3B | $1.1B | $3.7B | — | $679M | — | — | — | — | $5.9B | $2.9B | 5.4% | — | 10.5% | — |
| 2023-12-30 | $22.7B | $4.1B | $854M | $1.7B | $1.1B | $546M | $3.5B | $1.4B | $985M | — | $0 | — | — | — | — | $5.8B | $3B | 1.8% | — | 10.3% | — |
| 2024-12-28 | $25.8B | $5.1B | $1.6B | $3B | $2.4B | $636M | $3.1B | $1.4B | $862M | — | -$750M | — | — | — | — | $5.1B | $2.2B | 7.4% | — | 11.0% | — |
| 2025-12-27 | $34.6B | $7.3B | $4.3B | $7.7B | $6.7B | $974M | $3B | $1.6B | $1.3B | — | $1.5B | — | — | — | — | $10.6B | $3.8B | 10.7% | — | 11.9% | — |
AMD trades at 30.3x forward earnings against a peer median of 18.6x; EV/EBITDA of 78.7x against a peer median of 42.3x; 5 peers as of 2026-08-21.
| Trend | Impact | Note |
|---|
| Infrastructure adoption | positive | continued segment revenue growth could extend revenue and earnings growth if product execution holds. |
| Capital-spending intensity | neutral | Industry investment supports capacity but can raise cycle risk when demand slows. |
AMD is positioned as an established, profitable growth-infrastructure company, but its valuation requires sustained earnings and cash-flow conversion.
| Current / pullbacks | Build the position in stages while the Strong Buy rating remains supported. Pause new purchases if a documented review checkpoint or thesis-break trigger is breached. Review checkpoints: Cash conversion — below 0.8; Forward earnings multiple — 18 times or less. | Build the position in stages while the Strong Buy rating remains supported. Pause new purchases if a documented review checkpoint or thesis-break trigger is breached. Review checkpoints: Cash conversion — below 0.8; Forward earnings multiple — 18 times or less. |
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Add depreciation to net income, subtract maintenance capex, divide by diluted shares, and apply a normalized valuation multiple.
| AVGO |
| Broadcom Inc. |
| 18.6x |
| 22.9x |
| 42.3x |
| 37.3% |
| 49.0% |
| MRVL | Marvell Technology Inc. | 40.2x | 25.8x | 81.5x | 16.0% | 14.5% |
| ON | ON Semiconductor Corporation | 16.5x | 4.7x | 14.3x | 8.3% | 19.5% |
| LRCX | Lam Research Corporation | 26.9x | 16.7x | 44.8x | 65.1% | 37.4% |
