AMD估值过高，尽管基本面强劲，但当前价格缺乏安全边际，应避免买入。

Wall Street is now screaming that this stock could be much bigger than both of them. The company they are talking about just recorded a 50% increase in revenue. Its business in artificial intelligence has doubled in size, and the three biggest names in the field – OpenAI, Meta, and Anthropic – are now building their entire future around it. The stock has already risen by more than 120% this year.

So, is this really the next trillion-dollar behemoth, or is Wall Street setting you up to pay an inflated price at the worst possible time, as it always does? The company is AMD, and right now, Wall Street is completely in love with this company.

Yahoo Finance literally published an article wondering whether AMD is the next "Nvidia" .

Another headline claimed the stock could rise an additional 40%, and analysts are racing to raise their price targets. UBS is at 730, Key Bank at 725, Cantor at 700, and a whole host of companies are in the 640-660 range.

Just last week, Raymond James upgraded AMD to a " strong buy" rating and raised its price target to 641, arguing that the smart server chip market could balloon to $201 billion by 2030.

Immediately after AMD’s big AI event in July, six major Wall Street firms raised their price targets in just three weeks. By that time, the stock had already risen by about 123% during the year.

And when it dipped slightly after its latest earnings, some of these same analysts described it as a buying opportunity. They said it was an opportunity to snag the next Nvidia at a discounted price. Because saying that AMD will replace Nvidia is a very strong claim .

The smartest argument is simply that the AI ​​chip market is exploding so fast that the second-largest player in it can make investors extremely wealthy. In its most recent quarter , AMD's revenue jumped 50% to approximately $11.5 billion. Its adjusted earnings per share have exploded spectacularly, increasing by 246%, and its profit margins have risen to about 56 cents on every dollar. It generated over $1.5 billion in cash that quarter, and over $4 billion in the first half of the year, while maintaining a massive $13 billion in cash reserves and very little debt.

For the current quarter, management projected sales of approximately $13 billion , representing another 41% year-over-year jump. The data center business, the division that sells artificial intelligence chips, has grown by a staggering 107%, more than doubling to $6.7 billion. This division alone now represents 58% of the company's total.

Thus, AMD has officially transformed from a company that makes chips for laptops into a true force in the field of artificial intelligence.

This division alone generated more than $2 billion in profits last quarter. It's not just about artificial intelligence chips ; there are also brain server chips called "EPYC". It is also experiencing a boom , and we will return to talk about it directly. But having two engines instead of one makes growth much more robust.

Now, the personal computer business, which also grew by 23%, should not be overlooked, with Ryzen business-oriented chips growing by more than 50%, attracting major companies in the healthcare, technology, and finance sectors.

Honest note: Part of this massive growth seems bigger than reality because AMD incurred a one-time cost a year ago, making this year's comparison much easier. But even taking that into account, this remains a very strong quarter.

The management's projections for next year are also astonishing. They expect their data center business to double again in 2027.

Guys, if that's close to reality, this company is growing at a truly rare rate. To be honest, not every sector within AMD is experiencing explosive growth. The gaming chip business has declined by 31% because this segment is linked to the cycles of video game consoles.

So, AMD is not a magic machine in which everything grows. But the most important and massive part, the artificial intelligence engine and data centers, is growing strongly, and that is what drives the whole story.

The first argument: AMD may be the only real alternative to Nvidia, and this is crucial because AI giants do not want one company to control all AI chips in the world. That would give Nvidia enormous power over pricing. Therefore, they intentionally support AMD.

OpenAI, Meta and Anthropic have signed huge deals to build future AI systems based on AMD chips. A total of 14 gigawatts of computing power, a figure that is hard to imagine. Three of the most important artificial intelligence companies on the planet are designing their entire future around AMD.

This is a much stronger indicator than any laboratory performance measure . Even Microsoft is widely deploying AMD technologies for its artificial intelligence. AMD doesn't need to outperform Nvidia. You don't need to win the entire market. Just being the second strongest player in an explosive market could completely change the company.

And the giants like having AMD as a means of leverage to keep Nvidia's prices under control. The second argument for optimism. Unexpected success, those chips that represent the brain of the servers. Everyone is staring at the glittering AI chips, but AMD has been quietly dominating the server processor market , siphoning market share from Intel for years, and now controls about a third of it.

Here's the exciting part. These new AI agents need a lot of this specific type of chip to function. So, as the cake gets bigger, their share of it also increases. This is a multiplier growth momentum for the company.

Management's long- term goal is to capture more than half the market , and they expect this business alone to grow by more than 70% next year. This is not a far-fetched dream. It's happening now.

The third argument for optimism . AMD sells the entire system, not just the chip. The industry is shifting away from buying individual chips towards buying fully-fledged AI cabinets . AMD's response is called " Helios". It combines artificial intelligence chips, processing chips, networks, and software into one complete package.

AMD spent years quietly acquiring the missing pieces, such as a networking company, a systems design team, and much more to make all of this possible.

This means that for every large deal, AMD can sell more core components within the data center, making each customer significantly more valuable to AMD. The first argument for pessimism: their competitor, Nvidia. Their real trench is not just the chips, but the software. For years, AI developers have built everything on top of Nvidia's software system called "CUDA". It is what they know, what their tools work for, and what everything was actually built for .

Switching to AMD is not simply replacing a chip. You may have to rewrite mountains of software. AMD's software has become much better , but Nvidia continues to advance rapidly, and the range gap is huge.

So, AMD can make a great chip and yet find it difficult to attract customers away from a giant of this size.

The second state of pessimism , and it's a hidden state, folks. AMD's biggest customers are quietly turning into competitors. OpenAI is now working on designing its own chip. Amazon already has its own chip called "Trinium". Meta is also building its own chip. So, the same giants that are signing exciting AMD deals are also racing to build chips that may one day replace AMD .

The scary part is, even if AMD steals a large share of Nvidia, the overall market for companies like AMD could actually shrink if everyone starts making their own chips instead of buying them.

The top eight cloud companies are expected to spend more than $710 billion this year , with more of that going toward their own custom chips, rather than AMD chips.

In the third pessimistic scenario, AMD would have to undertake a massive manufacturing task . AMD does not manufacture its own chips. It relies almost entirely on a single company in Taiwan, TSMC, as well as a fragile chain of other parts suppliers.

To achieve those incredible goals for 2027, everything—from chips and memory to packaging, networks, servers, and power—must expand almost perfectly at the same time. The danger here may not even be a lack of customers. It may simply be the inability to manufacture them physically quickly enough.

AMD is pumping more than $10 billion into its supply chain in Taiwan alone to expand production capacity. There are already reports of bottlenecks in the most advanced stages of chip manufacturing and packaging.

Export rules already cost AMD hundreds of millions of dollars in China last year when it suddenly could no longer sell certain chips there. A single government decision in the United States or China could shrink AMD's market overnight, and that could change without any warning at all.

To secure the OpenAI and Meta deals, AMD offered each of them a special deal to buy huge quantities of their shares at a very low price , linked to the size of their spending. This isn't necessarily a bad thing , but it does tell you that AMD had to compromise a lot to win over these high-profile customers.

And for you, the investors in AMD, your stakes are being diluted. When they issue those shares to competitors, they dilute your stake as owners.

So, always look deeper than just the fact that OpenAI chose AMD. So, let's take a look at AMD here, guys. This is the true price of the company , $780 billion. This is the share price multiplied by the number of outstanding shares .

Whenever I look at a company, I also look at its corporate value. Guys, we've talked before about it being completely debt-free . This is correct. There is a difference of $4 billion between institutional value and market value. This is essentially their debt minus all their cash liquidity. The great part is that those four billion dollars can be covered in half a year of free cash flow if the cash flow continues like this .

Now, there are two scary things here. The stock is trading at 92 times free cash flow despite the cash flow doubling, and it is trading at 120 times earnings despite the earnings doubling as well.

Returns on capital are also low. For beginners among you, this means that they are not getting a good return on the money invested in the company. This basically means that you should pay a cheaper price to this company because they are unable to increase their profits as quickly as others do.

Look at this profit margin jump. They had essentially achieved 10% annually over the past five to ten years, then jumped to 15.6%. This looks great. I will never deny that . But whenever this happens, I always ask myself : Is this sustainable ? This is the fundamental question that I have about the whole of artificial intelligence. Are all these profit margins sustainable? Are we in a state of permanent stability?

Now, folks, nothing short of amazing is here. The revenue growth rate for three years is 23.6%, for five years 25.4%, and for ten years 26.7%, which is truly amazing. But again, is the profit margin sustainable?

Let's move on to our eight pillars here. Now, guys, it's not exactly appealing. We got four "X" marks. The listed shares rose slightly. Returns on capital have decreased, and the five- year price-to-earnings ratio and five- year free cash flow rate are poor . Cash flow is very high, debt is low , revenue is high, and net income is high. great. So, there is some glimmer of hope here. But there are some problems.

Okay guys, let's take a look at what the analysts think about this company. Guys, there's a lot of optimism here. Look at this. Earnings of $7.63 per share this year will grow to $42. This equates to five and a half times in the next four years. Again, no analyst wants to be wrong about this. So they will go along with the audience here.

Let's take a look at the profits . Profits grow from 51 billion to 237 billion. This means a 4.6x growth in the next four years. Now, guys , this is the problem. We have a story, and we have numbers. Our goal now is to compile them into a stock analysis tool . So I'm going to open the stock analysis tool, but I'm not going to lie to you guys. It is difficult for me to assume that a company will quadruple its revenues or more in the next four years.

I am looking at an analysis that covers 10 years. So, my goal here is to say: "Listen, I don't know what's going to happen in the next three or four years, but let's look longer-term. Let's allow this AI bubble to burst a little and then recover, because I think AI is going to be like the internet." Many people will suffer losses, but then the market will experience significant growth from now on. "Remember, in the dot-com era, even if you weren't around then, many internet companies went bankrupt." Did that mean the internet was over? Of course not. It has become far greater than we could have ever imagined. So, I first conducted a 10-year analysis.

Revenue growth. Guys, I put up percentages of 10, 18 and 26%, which I still consider to be high. Yes, I understand that. They are growing like crazy, and analysts predict they will quadruple in size in the next four years. However, I will commit to 18% for the next ten years. Even regarding this percentage, I feel some concern.

Next, there is the profit margin and free cash flow. Now, guys, I set profit margins of 10, 15, and 20, and free cash flow of 13, 17, and 22. This is somewhat similar to what Intel achieved at its peak. So, I sit here and say, "Yeah, I think that might make sense." And, guys, free cash flow is a much more important statistic to me. Therefore, I will focus on this free cash flow figure going forward.

Next, what price-to-earnings (PE) ratio and price-to-free cash flow ratio would I assign to this company 10 years from now? Okay, here's one problem we're facing, guys. Returns on capital are getting worse. Therefore, this is a sign of quality. I will continue to give this company a rating of 18, 22, and 26 simply because of the media hype, but I don't necessarily think that's the right measure of it. But I'm putting that here to talk about in the video, because I know a lot of people want to see the best possible scenario for it.

And finally, folks, as I always say, a 9 or 10% return to find the intrinsic value. What is the value of the company? It's not something I'm willing to pay for. So, I set a return of 9.5 percent here. Remember, this is not to determine the price I want. Rather, it is to find out what the company is actually worth.

Now, I want you to look at this and think about what we have just done. We did not listen to "Wall Street" and what they told us. We didn't chase after catchy headlines. We looked at the actual figures, revenues, profit margins, and cash flow, and tried to figure out the true value of this business to us today.

Based on a 9.5% return, guys, I have a low price of approximately 90, a high price of 685, and an average price of 250. So, we are still very far from that. We are looking at a return of approximately 2.5% if you buy at today's price.

So, I put in 15%. For me, I need to buy AMD stock at a price between $60 and $435, with a hypothetical average of around $160.

I am so far from this company that I have added it to my watchlist at a certain price and am waiting for it to reach it. The question I always ask is: Is this current level of revenue permanent? This is what we wonder about in all these companies. I don't know that. That's why, personally, even if the stock were at 150, I don't know if I would buy it because it falls within a "very difficult" range for me. I do not suffer from fear of missing out (FOMO). It's best to wait for this hype to die down and then find the great companies that will win in the long run. I'm not going to lie to you guys, this is difficult. But for me, I'd rather miss out on a big win because I don't really believe that this AI revenue is at a permanent level that will continue to grow from here.

So, quite frankly, this growth story is one of the best in the entire market, but never forget our golden rule. Even the greatest company on earth can be a very bad investment if you pay the wrong price for it. Wall Street is currently screaming, "It's the next Nvidia." This is exactly the kind of noise that drives ordinary people to buy at bad prices. So please don't buy AMD stock just because a news headline tells you to. Determine its true value, ask for an adequate safety margin for yourself, and let the numbers, not the noise, make your decision.