The stock market has started an interesting start this year. During the first few weeks of 2025, technology shares have in particular showed similar levels of momentum seen over the past two years – thanks to the continuous support for artificial intelligence narration (AI).
However, ecstasy stopped to screaming in late January after a Chinese startup called Deepseek released a model of artificial intelligence on Chatgpt from Openai.
What sparked the surprise of investors is that Dibsik claims to have built artificial intelligence much less than Openai, humans, confusion, and other emerging companies in the United States. Unwundious, technology shares have decreased dramatically over the past two weeks. In particular, chips have already been rocked.
Since Deepseek news began to capture in late January, share shares Advanced small devices (Nasdaq: AMD) It decreased by about 10 %. Below, I will analyze some interesting trends in the AMD evaluation and explore if it is now an appropriate time to buy the chip commander shares.
The evaluation measure that I find is useful Price forward to profits Multiple (P/E). This percentage takes into account what Wall Street analysts expect for the profits of the future company, which can help in providing a glimpse of how industry experts watch the company’s growth prospects for its peers.
In the table below, I summarized P/E forward from AMD and market markets as of the end of last year.
|
category |
9/30/2023 |
12/31/2023 |
3/31/2024 |
6/30/2024 |
9/30/2024 |
present |
|---|---|---|---|---|---|---|
|
Forward P/E |
24.6 |
39.4 |
53.8 |
47.4 |
30.1 |
25.6 |
|
Market value |
166 billion dollars |
238 billion dollars |
292 billion dollars |
262 billion dollars |
265 billion dollars |
194 billion dollars |
Data source: Yahoo! finance
The P/E to the front of AMD from 25.6 is basically in line with the levels seen in September 2023. The main difference that I see is that the company’s market value grew by approximately $ 30 billion during the 15 -month period.
The slide below the AMD revenue collapses and the operating income of 2024. Nafidia.
Last year, AMD data center business grew by 94 % to $ 12.6 billion. More importantly, the company generates a great influence in this work as shown in the margins of broad profit. Unfortunately, slow growth of AMD games and compact units leads to the total company’s revenues and profit profits – and this is what I think investors are affected by.
Negtember 2023 is near P/E from now and September 2023 indicates that analysts are mixing a proportional height in future profits compared to the increase in the price of AMD share during the past year or so. For this reason, the Monition of P/E was mainly flat instead of expansion.
In other words, I think analysts are mixing both the continuous growth in the work center and Constant slowdown through games and built -in chips – thus balance between the image of the comprehensive profits of the company. Personally, I do not fully comply with such an approach. Widely, I believe that accelerating revenues and profits from the AMD data center will outperform the other sectors that are not part of the GPU batch.
The way I look at the AMD evaluation at the present time is that the market seems to be a multiplier of about 10x to the data center income – and therefore, the AMD value has grown about $ 30 billion since September 2023.
I think the AMD data center works are much more valuable than $ 30 billion in the long run. NVIDIA account and networks are much greater than AMD, and investors have witnessed a historical rise in the NVIDIA share price for most of the past two years – adding multiple trillion to the company’s evaluation.
Given that AMD is already witnessing the adoption of MI300 accelerators with hyper Microsoft And giant technology like Definition platforms (Both NVIDIA customers also), I am optimistic that AMD will appear as a legitimate force in the world of data center sooner, not later.
Now I see as a profitable opportunity to benefit from AMD, because I see that the company’s evaluation is significantly reduced for NVIDIA in particular.
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*The stock consultant dates back from February 7, 2025
Randy Zuckerberg, former Director of Market Development and Speak for Facebook and Sister to Meta Platforms, Mark Zuckerberg, member of Motley Fool Board of Directors. Adam Sepataco It has functions on identification platforms, Microsoft, and NVIDIA. Motley Fool has positions in advanced advanced devices, Meta, Microsoft and Nvidia. Motley Fool recommends the following options: Long January $ 2026 $ 395 on Microsoft and Short January 2026 $ 405 calls on Microsoft. Motley deception has Disclosure.
AMD has done something that has not done it since 2023 It was originally published by Motley Fool