Advanced Micro Devices Positioned for Growth in AI and Data Centers
"Yeah, that's that's Advanced Micro Devices. Advanced Micro Devices is well positioned for for many reasons. Uh but GPUs is one of them. If there's any company that can take market share from Nvidia, it's advanced micro devices. They're going to launch the MI450 line this year which is a rack scale system which means that they will have viable solutions for the hyperscalers which means that people like Google, Amazon, Microsoft, Meta, OpenAI, all the large hyperscalers will be able to buy these uh GPUs in bulk not just as a niche or as a side project. Put it on par with Nvidia as far as its business capability and I expect to see that its GPU and data center business will grow and I think also right now the analyst forecasts are much too low."
Thomas Hughes highlights AMD as his top semiconductor stock for 2026, emphasizing its potential to take market share from Nvidia through the launch of its MI450 line. He cites the company's strong positioning in GPUs and data center markets, noting that current analyst forecasts undervalue its growth prospects.
Trade Call on AMD Based on Undervaluation and Growth Catalysts
"Let's start with AMD. AMD stock is down by 15% over the last month because of intense competition in data centers, not just from Nvidia, but now Google is also starting to sell their custom TPUs to other companies. And now AMD is down by almost 5% after Oracle and Broadcom's earnings. Investors are spooked because AMD trades at around 100 price to earnings ratio. But if you've been watching this channel for a while, you know that the PE ratio is a terrible valuation metric for companies with high earnings growth. AMD is expected to more than double their earnings next year, primarily from growing their data center business by around 80% per year for the next 3 to 5 years. A lot of that growth will come from AMD's massive deal with Open AI, where they'll deploy up to 6 gawatt of Instinct GPUs, which could be worth over a hundred billion in data center revenues for AMD. And like I said when this partnership was announced, the real win for AMD here is validation for their Instinct and Rockom ecosystems, which means they could see more huge deals for data center accelerators from other AI companies like Anthropic, just like we saw with Broadcom. Another benefit AMD has in this specific situation is that their revenues aren't totally tied to AI. Around 43% of AMD's revenues come from their client and gaming segment, which focus on PC CPUs, GPUs, and semi-custom chips for game consoles. This is the segment that was actually responsible for the vast majority of AMD's revenue growth last quarter because it grew by 73% year-over-year compared to their data center segment, which was up by 22%. And don't forget that around half of AMD's data center sales are from their epic line of CPUs, not their Instinct AI accelerators. I usually point that out as a negative because I want my investments to have as much exposure to AI as possible. But in this case where investors are panic selling AI stocks, it's actually an upside because AMD is very well diversified, much more than the market is currently giving them credit for. In fact, discounted cash flow models like Simply Wall Street's calculate AMD's fair value to be around 380 per share, while the stock is trading at around 210, making AMD more than 40% undervalued at today's prices. Set another way, AMD stock would have to almost double to reach its fair value today, thanks to the insane revenue and earnings growth that they're expecting over the next few years. Like I said at the start of this video, this is a big opportunity for long-term investors."
The speaker highlights AMD as an attractive trade opportunity due to its sharp undervaluation relative to DCF fair value estimates and strong growth catalysts, particularly in its data center business and AI partnerships. Despite short-term selloffs driven by broader market panic, AMD's diversified revenue sources and significant growth potential position it as a compelling long-term investment.
Bullish Long-term Potential for AMD Amid AI Catalyst
"Now, overall, I think there is a lot of great information. I think for AMD, the long-term thesis is still pretty much intact. I still believe this is a trillion dollar potential company, especially if the MI450 comes out and delivers without any form of hiccups or mistakes. Now, that's the issue, right? If the MI450 Helios wreck is a whole massive different system and they will if issues do arise, the market will punish AMD accordingly. So nearperfect execution is needed and this is something that's not as easy as just selling a chip. But overall I'm pretty pretty bullish for the stock and I don't mind taking the risk with this one."
The speaker remains bullish on AMD's long-term prospects, emphasizing the company's potential as a multibagger if the MI450 is executed flawlessly. They highlight significant revenue growth catalysts driven by AI partnerships and market share expansion, while cautioning that any execution missteps could lead to market punishment.
AMD Trade Call: Bullish Earnings and Price Target
"Now, the next thing I want to look at for AMD is their AMD financial analyst events. And this was extremely extremely bullish in my opinion. We did see that AMD projects about $20 in earnings per share by the at least 2030. They mentioned within the next two to five years. And if those numbers are true, I personally believe AMD is extremely extremely cheap. Right? If we look at a 20 earnings per share and you give uh normalized PE ratio for the semiconductor industry of 30, that's a price target of $600 for AMD."
The speaker expresses a strong bullish stance on AMD, citing projected $20 EPS and a normalized PE ratio of 30 to justify a price target of $600. This analysis is supported by expectations of accelerated growth in AI, data centers, and semiconductor markets over the next two to five years, suggesting that AMD is undervalued.
Bullish Progress and Market Traction for AMD
"I remember I would make videos recommending AMD stock as a buy and it was underperforming and it was trailing Nvidia by a large margin and investors in the comment section were disappointed and continued to express their frustration. When is AMD going to gain traction in this category? It's taking so long. They're never going to catch up to Nvidia. They're never even going to approach Nvidia. They started calling AMD the advanced money destroyer. And all of that sentiment has almost vanished here in 2025 as AMD has made progress. They've developed this 350 series and now the next generation 400 series and they're gaining significant orders, making large deals and partnerships with some of the buyers in deals worth billions and tens of billions of dollars approaching hundreds of billions of dollars. And so you could understand why investors are excited about AMD stock."
The speaker contrasts earlier bearish views on AMD with the notable turnaround driven by the company's technological advancements and significant partnerships, which have led to a surge in investor excitement. This commentary underscores strong growth prospects and increased market traction for AMD, bolstering its position as a compelling long-term stock idea.
AMD's Long-term Strength
"Can you imagine the cash flows this company's going to be producing two years out, three years out from now? Unbelievable. I think if we look at this company 24 months from now, we'll see it as one of the strongest companies in the world. Ten years ago, people thought this company might go bankrupt. Now, it's become one of the strongest forces in the market with a balance sheet that could really impress in the near future."
The host offers a long-term bullish commentary on AMD, emphasizing its transformative turnaround from near-bankruptcy a decade ago to a robust company with strong future cash flows and balance sheet potential over the next two years.
AMD Stock Buy Recommendation
"AMD stock is up over 112% year-to date in 2025. And of course, I'm happy about that because I've been recommending AMD stock as a buy almost all year long. And I had it recommended as one of the best stocks to buy in the first half of the year and for all of 2024."
The speaker provides an actionable buy call on AMD, citing its impressive 112% YTD gain and past recommendations. He underscores AMD's potential as its stock price is finally reflecting the intrinsic value identified years ago, making it one of the best stocks to buy across multiple timeframes.
AMD: Long-Term Bullish Performance Amid Dip
"but overall if you look at the long term of things and it sucks right year to date Nebia is up roughly 95% Nebia's up 187% the first one was core uh Nvidia up roughly 34% AMD killing it this is the one that's been carrying the portfolio pretty much this past week up 105% within the past 5 days still up over 7% even during these nasty sell-offs."
The speaker emphasizes that despite recent market volatility and declining stock prices in several AI and semiconductor stocks, AMD has performed exceptionally well. He mentions that while other stocks have been volatile, AMD's strong performance—up 105% in the past week—has been a key contributor to his portfolio, reinforcing a long-term bullish view on the underlying AI and semiconductor fundamentals.
AMD Valuation Reflects Cautious Outlook Despite Growth Prospects
"Now all that being said, I feel these positive prospects are mostly reflected in AMD stock price valuation. It's trading at a forward price to earnings of 46 compared to the forward price to earnings of Nvidia at 33. So AMD stock right now is trading at a valuation that's roughly 33% more expensive than Nvidia when measuring on a forward price to earnings basis. Furthermore, when I calculate the company's fair value using my proprietary discounted cash flow valuation model, the current market price at 237 is above the intrinsic value per share I calculated at 193. So regardless of the valuation metric I'm using, AMD stock looks uh either fairly valued or slightly overvalued given its current market prospects. I can understand if you already own the stock. It's a reasonable stock to hold because it's got great prospects both in the near-term and the medium-term and the longer term as I think it will continue to grow to gain more market share in this industry."
The speaker provides a detailed assessment of AMD stock, noting that despite the company's promising margins and growth in its data center segment, the stock appears fairly valued or even slightly overvalued based on its forward P/E and discounted cash flow analysis. The commentary suggests that while AMD may be a reasonable hold for current investors, it does not present a compelling buy opportunity.
AMD Outperformer Commentary
"earnings AMD, your top gainer in the S&P 500 and the NASDAQ 100, a gain of 9% in today's session. Uh the company projected accelerating sales growth over the next 5 years driven by strong demand for its data center products. Remember they had a meeting yesterday and the CEO making some comments. She said the total AI chip market will reach $1 trillion by 2030. Um so again that stock definitely an outperformer."
The speaker highlights AMD as a top performer with a 9% gain, supported by strong outlook on data center demand and an AI chip market that could reach $1 trillion by 2030, thereby labeling the stock as an outperformer.