BlueChip Breakdown: Advanced Micro Devices ($AMD)

AMD Logo

Date: July 29, 2025 By: Will Svendsen

📌Company Snapshot Sector:

Semiconductors / Technology

Market Cap: ~$250B

Business: Designs and sells CPUs, GPUs, and custom chips for PCs, servers, and gaming consoles

Core Revenue Driver: Data center and AI-related chip sales

📈Recent Performance

Down ~15% from 52-week highs, after strong 2023–24 rally

Steady growth in data center and AI segments

Solid Q2 earnings: beat on EPS, in-line revenue

Concerns over PC and gaming segments cooling off

📊Key Metrics & Valuation

P/E (FWD): ~35

EV/EBITDA: ~26x

FCF Yield: ~1.6%

PEG Ratio: ~1.3

Revenue CAGR (past 5 yrs): ~20%

💰DCF Summary

WACC: 8.5%

FCF CAGR (next 5 yrs): ~11%

Terminal growth: 2%

Intrinsic Value Estimate: ~$190/share

Market Price: ~$155/share

Implied Upside: ~22%

(Assumes strong growth in data center and AI segments with flat PC growth)

⚡Catalysts to Watch

Expansion of MI300 AI chips and server business

Continued demand for hyperscale data centers

Custom chip wins in gaming and cloud partnerships

AI-driven tailwinds boosting TAM through 2026+

⚠️Risks to Monitor

PC market softness impacting legacy revenue streams

Pricing pressure from competitors (especially Intel & NVIDIA)

Margin compression if growth slows or R&D ramps too quickly

📌Final Take

Rating: Long-Term Buy AMD is positioned at the intersection of AI innovation and enterprise infrastructure. With proven execution and a solid product roadmap, it offers meaningful upside in a secular growth trend - though short-term volatility remains possible.

📚 Sources:

1. Yahoo Finance – AMD Overview https://finance.yahoo.com/quote/AMD

2. Macrotrends – AMD Revenue History https://www.macrotrends.net/stocks/charts/AMD/advanced-microdevices/revenue

3. AMD Investor Relations – Q2 2025 Earnings https://ir.amd.com

4. Finbox / Morningstar (via FMVA tools) o Used for EV/EBITDA, PEG ratio, WACC estimation, FCF historicals

5. CNBC – Market Coverage (July 2025) o General commentary on semiconductor earnings and AI chip demand