$Advanced Micro Devices (AMD.US)$ This stock is too expensiv...
This stock is too expensive to own. Valuation is super high if u look at its PE. Growth rate is subpar, not fantastic at all compare to Nvidia whose growth rate is high.
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Deep Sea OP : EPS dropped after pandemic is over with EPS below $1.
Deep Sea OP Deep Sea OP : Fy2023 EPS is 53 cents. Pathetic earnings.
DavidCCL : You shorting this stock or just giving advise?
Deep Sea OP DavidCCL : This is my view only. Not shorting.
104917541 Deep Sea OP : lol i think you should do your research first before giving your view. Do you even know that the xilinx acquisition is the reason for the high PE? Look at non GAAP
digimonX : I have invested in AMD long enough to have heard all these complains abt high PEs.
When AMD was in the $5 range, pple complained it was too expensive for a company going bankrupt.
When AMD was in the $20 - $50 range, pple complained PE was too high because it was facing a formidable opponent, which was Intel & the success rate wud be 0. It took AMD 3 generations of improvement on its Ryzen CPUs to really kick Intel's ass. Stock price ran up to $160 at the end of 2021 before rate hikes in 2022 brought it down to $50+.
The latest reports I read showed Intel's CPUs having high failure rates & Intel struggling to replace them under warranty. Their laptop platform is also unstable. Manufacturers are reportedly going to put more time producing AMD-based laptops. Who wud have thought the-best-in-class Intel wud be in a sorry state...
Now pple are saying AMD's PE is too high & it cannot match nVidia. First, one needs to understand AMD has thus far been a CPU company rather than GPU. It was correct they were nearly bankrupt in early 2010s & had severe resource contraints. They cud only pick 1 area to fight & they prioritised CPU. They have only really started focusing on GPU after the AI craze started & therefore at a distant 2nd to nVidia. However, AMD is the only other company that is capable of producing GPUs near or at the level nVidia can. Major players want a second source to nVidia because it is not an easy company to work with.
digimonX : AMD's business is also more diversified than nVidia's. There will always be demand for CPU. If u have been studing this industry for a while, there was a time when there was high GPU demand for crypto mining. Well, the bubble burst & both AMD & nVidia were left with inventory glut that took several quarters to clear. Nobody knows how long & far the AI craze will go. However, we know Lisa Su is not giving up the CPU business & keeps pushing the boundaries. Intel has no response to the upcoming Ryzen CPU update. If a good % of Intel's revenue goes to AMD, it wud be good growth. There are also rumours recently that AMD is looking at possibly creating arm-based CPUs in 2026 (the timeline is not fixed).
AMD's PE has always been high fr even 10 yrs ago. One should look at forward PE for growth companies. AMD's earnings are lumpy & back heavy in H2 2024. If u take a slow quarter & measure its growth, of course it goes nowhere. They will eventually catch up when they execute on their roadmaps & product ramps.
Lastly, ask urself, if I tell u AMD will be $280 in 3 yrs time, would u pay $160 today to buy its shares? Similarly, if u knew AMD would be $160 today, wud u have bought at $80 last Oct? Those pple who complained abt high PE from $5 all the way up to $80 missed a big opportunity. u can complain all u want but sometimes stock market doesn't behave the way u think.
Anyway, I wish u good luck in ur investment journey.
Salmon Klein : buy nvidia the man!!
Deep Sea OP digimonX : If this stock is so good, why didn’t WB invest in it instead of buying AAPL?
DavidCCL : Do you own this stock? Why is the interest?
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