Advanced Micro Devices, Inc.AMDNASDAQ
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Executive Summary
Latest Data: Dec 2025Technology•Semiconductors
$338.0BMega Cap
A large-scale business, with solid profitability, showing strong growth priced at a premium.
Key Investment Themes
High-growth business (34% revenue expansion)
Solid 13% profitability
Premium valuation (78.0x P/E)
Business Narrative
Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom.
TechnologySemiconductors
High Growth
Revenue Mix
Single segment business
Bull Case
- +Strong revenue growth demonstrates market share expansion
- +Solid profitability with room for margin expansion
- +Strong cash generation funds reinvestment and shareholder returns
Bear Case
- -Premium valuation leaves limited margin of safety
Company at a Glance
Business Performance
Key Highlights
Positive Signals
- Exceptional revenue growth exceeding 25% annually
- Free cash flow growing strongly, indicating quality earnings
- Conservative balance sheet with low debt levels
- Strong liquidity position with ample current assets
- Trading 37% below 5-year average valuation
Watch Areas
- Premium valuation requires continued strong execution
Financial Health
Liquidity
Strong
Current Ratio2.85
≥2.0 = Excellent
Cash & Equivalents$5.5B
Leverage
Strong
Debt / Equity0.07
<1.0 = Low leverage
Interest Coverage28.20x
≥5x = Comfortable
Efficiency
Concern
Return on Equity6.9%
<8% = Weak
Return on Capital5.4%
<8% = Weak
Valuation Assessment
Market Cap
$338.0B
Mega Cap
P/E (TTM)
78.0x
Elevated
vs 5Y avg: 123.1x (-37%)
P/S (TTM)
9.8x
Elevated
vs 5Y avg: 8.7x (+12%)
EV/EBITDA
46.3x
Elevated
vs 5Y avg: 40.7x
(+14%)
(+14%)
P/E Historical Range (5Y)
Min: 56.1xAvg: 123.1xNow: 78.0xMax: 278.6x
P/S Historical Range (5Y)
Min: 4.3xAvg: 8.7xNow: 9.8xMax: 10.8x
EV/EBITDA Historical Range (5Y)
Min: 17.9xAvg: 40.7xNow: 46.3xMax: 57.1x
Valuation Corridor
EXPENSIVE
PEG Ratio
47.43
P/E 78.0x / Growth 164.4% = Expensive
FCF Yield
2.0%
vs Cost of Capital ~8.0% = Weak
P/E Corridor (5Y)78.0x
56.1xFair: 56.1x-213.4x278.6x
P/S Corridor (5Y)9.8x
4.3xFair: 6.0x-10.8x10.8x
EV/EBITDA Corridor (5Y)46.3x
17.9xFair: 26.1x-55.2x57.1x
Detailed Financials
Comprehensive financial statement data for deep analysis
| Metric | Dec 21 | Dec 22 | Dec 23 | Dec 24 | Dec 25 |
|---|---|---|---|---|---|
| Return on Equity | - | - | - | - | - |
| Return on Invested Capital | - | - | - | - | - |
| Gross Margin | 48.2% | 44.9%↓6.9% | 46.1%↑2.7% | 49.4%↑7.0% | 49.5%↑0.3% |
| Operating Margin | 22.2% | 5.4%↓75.9% | 1.8%↓67.0% | 7.4%↑316.8% | 10.7%↑44.7% |
| Net Margin | 19.2% | 5.6%↓70.9% | 3.8%↓32.7% | 6.4%↑69.0% | 12.5%↑96.6% |
| Earnings Yield | - | - | - | - | - |
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