Why AMD Might Still Be a Good Buy (Or Not)
On July 17, AMD’s stock tumbled 10.21 % while the Nasdaq 100 dipped 2.94 %. If you’re wondering whether this is a good time to buy, let’s dive into the numbers (and a sprinkle of humor) that Analyst Cory Mitchell from Tradequotex.com has shared.
Quick‑fire Snapshot
- Past Performance: Over the last decade, AMD delivered an average annualized return of 42.4 %—that’s almost four times the S&P 500’s 12.9 %.
- Profit Growth: Earnings Per Share (EPS) grew at a staggering 30.8 % per year over the past five years. Analysts predict 30.6 % growth over the next five.
- Current Price‑to‑Earnings: Roughly 230× based on the latest reported figures. However, if we look ahead to 2024 earnings, it drops to an estimated 49×.
- Forward PEG: At 1.9, the ratio suggests AMD is overvalued—with a “fair” reading sitting around 1. Nvidia’s cooler 1.0 gives a simpler picture.
Standardized vs. Reported Earnings
Ever wonder why the numbers look different? Standardized earnings, aka normalized earnings, strip away seasonal quirks and one‑off revenue spikes. That gives a clearer view of the company’s everyday performance.
- Q2 2023: $0.02 (norm) vs. $0.58 (reported)
- Q3 2023: $0.18 (norm) vs. $0.70 (reported)
- Q4 2023: $0.41 (norm) vs. $0.77 (reported)
- Q1 2024: $0.07 (norm) vs. $0.62 (reported)
Because analysts often base forecasts on reported earnings, the valuation can feel inflated. When we look at the normalized view, the stock still smells pricey.
Technical Tethers
In 2023 & early 2024, AMD rode a bull wave. It peaked in March, hit a dip in May, bounced back, but now seems to be sliding back toward older lows. In plain English: the chart’s telling a “down‑trend” story.
Bottom Line?
- AMD’s fundamentals are nothing short of impressive.
- Valuation is on the high side—especially if you consider the normalized earnings.
- Short‑term swing could be deceptive; the long‑term mission seems solid.
So, is it a good buy? If you’re patient and willing to ride out the volatility, AMD’s track record could still pay off. As always, do your homework—and maybe keep a laugh in your pocket while the market does its flips!
