Great video but the DCF valuation is showing that the stock is overvalued. Also, declines in operating cash fow and free cash fow raise concerns about cash generation from core business activities.
Yeah so when I made the video, it was undervalued. Most semiconductor companies are very cyclical and they go through many boom and bust cycles. Right now, the semiconductor market is coming out of the bust cycle. The PC market and most part of the semiconductor market went through a huge correction throughout 2023, so that has impacted AMD, Intel, Applied Materials, Lam Research and most semiconductor companies over the past 2 years. Now, the PC market is recovering, the AI server market is driving the most growth, the memory market is recovering because of AI, consumers are buying high performance PCs again, so in my view, all these trends (especially AI server market growth) and semiconductor recovery should benefit AMD over the next several quarters and throughout 2025.
Hi Victor, I just started following your channel and I like how you analyze a business and use the information to estimate its intrinsic value and provide recent news, whats to watch out for. I have been considering investing in AMD and NVIDIA for a while. With AMD prices below 140, I feel like its the time to start adding them to our portfolio. Any suggestions?
I’ll upload a new AMD stock analysis video this weekend. I can’t advise you on what you should do, but I’ll talk about whether AMD is still undervalued now based on the latest earnings.
I wouldn’t know. AMD guided $4.5 billion this year which I think will be higher this year. Next year I’m just guessing doubling to around $9 billion since many customers won’t be able to buy Blackwell. Based on what know, there is a huge demand for Blackwell which exceeds supply. And there’s a huge supply constraint on CoWoS and HBM throughout 2024 and 2025.
Hi, I think using a terminal growth of 9.0% rate is way to ambitious and your model is very likely to overestimate intrinsic share price! What is your rational behind opting for this figure?
It depends on the business. It’s very reasonable for a semiconductor growth company. Typically, the semiconductor market excluding memory grows about 10% each year. The well-established semiconductor growth companies like AMD, Nvidia, TSMC, often grow much higher than 10% each year. You would use a very low terminal growth rate 2% to 5% if it’s a very mature slow growth company like Walmart, Coke, etc.
@@TheIntelligentInvestor thanks for your reply and explaining your thoughts. I usually use terminal growth rates aligning with average historic US GDP growth. I think that even the strongest growth companies will eventually mature and won’t be able to maintain above average growth rates for perpetuity! :)
Hello, Good job with your video, would it be possible if you could go over MELI stock. It seems to be at a good price to start buying. Hope you have a good day!
AMD makes great hardware. it is unfortunate that their software/firmware teams are below par. e.g., doing math operations is way faster with Intel's math libraries than with AMD's own
That’s a very good point. Based on what I know, AMD is investing in and hiring many software engineers now because they want to catch up or at least be closer to Nvidia’s CUDA and software optimization, libraries, tools, etc. Apparently Nvidia has had more software engineers than hardware engineers for many years. Jensen Huang is well ahead of everyone.
It's worth the effort to learn how to pronounce the 'v' sound in English. You already learned so much about the language. Just vibrate your lower lip against your top teeth with FULL CONTACT, every time!
I disagree with stock analysts who focus 100% on AI in making predictions about AMD and do not also consider the much more important none AI products from AMD, Nvidia and Intel. AMD APUs (combined CPUs and GPUs on one chip) are used in all Xboxes, all PS5s and all Steam Decks which must make AMD huge profits. No Intel or NVDIA chips are used in any of these consoles. It is unlikely that the next generations of these products will use any NVidia or Intel chips. The last two generations of Intel CPUs have a tendency to melt and so fail if they are driven too fast. This is presumably due to the fact that Intel chips have much larger transistors than AMD or NVidia chips and so produce more potentially dangerous heat as they operate. TSMC manufacture all recent AMD and NVidia chips (all of which have tiny transistors) and so they have the huge high speed and low power advantage that has been the making of Apple whose chips are also exclusively manufactured by TSMC.
I disagree with your disagreement:) My analysis mainly focuses on AMD’s data center business because it is AMD’s largest revenue contributor and the largest growth driver now vs AMD’s other business segments (consumer CPUs, GPUs, custom APUs for consoles, FPGAs, SoCs.). If you look at the overall semiconductor market and AMD’s recent acquisitions (eg ZT and another AI startup), you would notice AMD’s strategy is very similar to Nvidia’s strategy. Nvidia is focused a lot more on its data center business since it drives the most growth. AMD is following the same route, building complete AI systems going forward, not just AI GPUs. I’m a PC gamer, and I know AMD’s recent years’ high-end CPUs for consumers and servers are much more competitive and energy efficient than Intel. I expect Intel will continue losing market shares to AMD in both consumer CPUs and server CPUs. Intel is just too behind in process node technologies, mass manufacturing of leading-edge chips, and has many execution and design issues (eg Intel’s latest CPU instability issues).
@@TheIntelligentInvestor In one year's time hundreds of millions of PCs will become obsolete because they are not modern enough to run Windows 11 and Windows 10 will no longer be supported. If Microsoft does not relent and still chooses to not allow Windows 11 to be used on old PCs then AMD will sell hundreds of millions of PC processors to people who will need to upgrade or replace their existing obsolete PCs. That means that I predict that next year consumer CPUs will contribute much more than at present to AMD profits.
Well that may be true. I also own AMD:) What will be exciting is AMD’s upcoming Strix Halo APUs and 9800X3D cpu. According to rumors and leaks, Intel’s upcoming arrow lake will likely not be able to compete with 9800X3D in gaming. I bet most gamers won’t be buying Intel’s lunar lake and arrow lake CPUs since Intel has handled 13th/14th CPU instabilities and RMA poorly. So AMD is the best option now.
Stock based compensation is not a real expense? Really? “If options aren't a form of compensation, what are they? If compensation isn't an expense, what is it? And, if expenses shouldn't go into the calculation of earnings, where in the world should they go?” - Warren Buffett Subtract SBC from free cash flow and you have zero FCF...No thanks. I'd rather own Nvidia.
Bruh. I said the very large amortization of acquisition-related intangible (from acquiring Xilinx), is a non-cash expense AMD has to deduct every quarter which makes its GAAP operating margin exceedingly low. I don’t consider it as a real expense. I didn’t say the stock based compensation.
@@TheIntelligentInvestor You included SBC in your red frame, so I assumed that you are talking about both, since both affect gaap and non gaap operating income. And this does not change the fact that SBC is extremely high relative to FCF. Compare this to Nvidia. Sorry for any misunderstanding...
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Amd- I’m adding more to my portfolio.
Thank you! You’re the best! Great analysis!
Thanks for watching!
Thx, great Timing for the Video. Greetings from coastal lassmitmrandaa
Excellent breakdown and work as always! Are you planning to do an update on asml?
Yeah, ASML will be my next video.
Great job, is it possible to look into PLTR?
Wow! AMD to the moon. Catch the strong momentum before it doubles.
Yup AMD is trying to copy Nvidia’s AI data center business now.
Would be nice.
is it possible for yout to fo a run down on micron tech, with the upcoming chp factory, i feel as it is extremely undervalued.
Yeah I think I’ll make a video about Micron next month after ASML.
@@TheIntelligentInvestor thank you!
can you do a broad marker report
great video
Great video but the DCF valuation is showing that the stock is overvalued. Also, declines in operating cash fow and free cash fow raise concerns about cash generation from core business activities.
Yeah so when I made the video, it was undervalued. Most semiconductor companies are very cyclical and they go through many boom and bust cycles. Right now, the semiconductor market is coming out of the bust cycle. The PC market and most part of the semiconductor market went through a huge correction throughout 2023, so that has impacted AMD, Intel, Applied Materials, Lam Research and most semiconductor companies over the past 2 years. Now, the PC market is recovering, the AI server market is driving the most growth, the memory market is recovering because of AI, consumers are buying high performance PCs again, so in my view, all these trends (especially AI server market growth) and semiconductor recovery should benefit AMD over the next several quarters and throughout 2025.
@@TheIntelligentInvestor thank you for your reply and analysis as always! New sub :)
@@TheIntelligentInvestor Us long term amd shareholders can only hope.
Hi Victor, I just started following your channel and I like how you analyze a business and use the information to estimate its intrinsic value and provide recent news, whats to watch out for.
I have been considering investing in AMD and NVIDIA for a while. With AMD prices below 140, I feel like its the time to start adding them to our portfolio. Any suggestions?
I’ll upload a new AMD stock analysis video this weekend. I can’t advise you on what you should do, but I’ll talk about whether AMD is still undervalued now based on the latest earnings.
Buy the dips ,sell the rips is what seems to happen all the time with amd. When will this change?
what do you think mi300 series revenue will be in 2025
I wouldn’t know. AMD guided $4.5 billion this year which I think will be higher this year. Next year I’m just guessing doubling to around $9 billion since many customers won’t be able to buy Blackwell. Based on what know, there is a huge demand for Blackwell which exceeds supply. And there’s a huge supply constraint on CoWoS and HBM throughout 2024 and 2025.
@@TheIntelligentInvestor i think 2024 revenue will be $5.0-$5.5 billion, and 2025 will be 10b
Hi, I think using a terminal growth of 9.0% rate is way to ambitious and your model is very likely to overestimate intrinsic share price! What is your rational behind opting for this figure?
It depends on the business. It’s very reasonable for a semiconductor growth company. Typically, the semiconductor market excluding memory grows about 10% each year. The well-established semiconductor growth companies like AMD, Nvidia, TSMC, often grow much higher than 10% each year. You would use a very low terminal growth rate 2% to 5% if it’s a very mature slow growth company like Walmart, Coke, etc.
@@TheIntelligentInvestor thanks for your reply and explaining your thoughts. I usually use terminal growth rates aligning with average historic US GDP growth. I think that even the strongest growth companies will eventually mature and won’t be able to maintain above average growth rates for perpetuity! :)
@@LBNG97 what is average historical nominal US GDP growth?
Buying nvdia
Same:) buy the dip!
Hello, Good job with your video, would it be possible if you could go over MELI stock. It seems to be at a good price to start buying. Hope you have a good day!
Nope I won't be analyzing MELI. It's near ATH. I usually like to analyze a stock if it's undervalued.
AMD makes great hardware. it is unfortunate that their software/firmware teams are below par. e.g., doing math operations is way faster with Intel's math libraries than with AMD's own
That’s a very good point. Based on what I know, AMD is investing in and hiring many software engineers now because they want to catch up or at least be closer to Nvidia’s CUDA and software optimization, libraries, tools, etc. Apparently Nvidia has had more software engineers than hardware engineers for many years. Jensen Huang is well ahead of everyone.
Which investing platform do you suggest? I am planning to move away from Robinhood.
I’m not in the US. But I heard Interactive Brokers is one of the best.
@@TheIntelligentInvestorhow do you manage the currency loss? Just curiousity as you not in usa.
@leonardom6031 Nope I keep my strategy very simple. I only buy US stocks.
@@TheIntelligentInvestor Uhm yeah but you have somehow convert your currency in usd dollar or back?
Yeah that’s the issue. I’m Canadian, so I have to convert CAD to USD to buy US stocks. If I sell US stocks, I just keep them in USD.
pls do one for Micron
looking really attractive at current share price
I'll try to do Micron maybe next month.
Cruickshank Summit
AMD is overtaking Intel in computer gaming. Used to
be seen as cheaper alternative but now amd’s cpus are way faster and cheaper.
why you open many account ?
Different purposes/tax benefits.
It's worth the effort to learn how to pronounce the 'v' sound in English.
You already learned so much about the language.
Just vibrate your lower lip against your top teeth with FULL CONTACT, every time!
I disagree with stock analysts who focus 100% on AI in making predictions about AMD and do not also consider the much more important none AI products from AMD, Nvidia and Intel.
AMD APUs (combined CPUs and GPUs on one chip) are used in all Xboxes, all PS5s and all Steam Decks which must make AMD huge profits. No Intel or NVDIA chips are used in any of these consoles. It is unlikely that the next generations of these products will use any NVidia or Intel chips.
The last two generations of Intel CPUs have a tendency to melt and so fail if they are driven too fast. This is presumably due to the fact that Intel chips have much larger transistors than AMD or NVidia chips and so produce more potentially dangerous heat as they operate. TSMC manufacture all recent AMD and NVidia chips (all of which have tiny transistors) and so they have the huge high speed and low power advantage that has been the making of Apple whose chips are also exclusively manufactured by TSMC.
I disagree with your disagreement:) My analysis mainly focuses on AMD’s data center business because it is AMD’s largest revenue contributor and the largest growth driver now vs AMD’s other business segments (consumer CPUs, GPUs, custom APUs for consoles, FPGAs, SoCs.). If you look at the overall semiconductor market and AMD’s recent acquisitions (eg ZT and another AI startup), you would notice AMD’s strategy is very similar to Nvidia’s strategy. Nvidia is focused a lot more on its data center business since it drives the most growth. AMD is following the same route, building complete AI systems going forward, not just AI GPUs. I’m a PC gamer, and I know AMD’s recent years’ high-end CPUs for consumers and servers are much more competitive and energy efficient than Intel. I expect Intel will continue losing market shares to AMD in both consumer CPUs and server CPUs. Intel is just too behind in process node technologies, mass manufacturing of leading-edge chips, and has many execution and design issues (eg Intel’s latest CPU instability issues).
@@TheIntelligentInvestor In one year's time hundreds of millions of PCs will become obsolete because they are not modern enough to run Windows 11 and Windows 10 will no longer be supported. If Microsoft does not relent and still chooses to not allow Windows 11 to be used on old PCs then AMD will sell hundreds of millions of PC processors to people who will need to upgrade or replace their existing obsolete PCs. That means that I predict that next year consumer CPUs will contribute much more than at present to AMD profits.
Well that may be true. I also own AMD:) What will be exciting is AMD’s upcoming Strix Halo APUs and 9800X3D cpu. According to rumors and leaks, Intel’s upcoming arrow lake will likely not be able to compete with 9800X3D in gaming. I bet most gamers won’t be buying Intel’s lunar lake and arrow lake CPUs since Intel has handled 13th/14th CPU instabilities and RMA poorly. So AMD is the best option now.
Stock based compensation is not a real expense? Really?
“If options aren't a form of compensation, what are they? If compensation isn't an expense, what is it? And, if expenses shouldn't go into the calculation of earnings, where in the world should they go?” - Warren Buffett
Subtract SBC from free cash flow and you have zero FCF...No thanks. I'd rather own Nvidia.
Bruh. I said the very large amortization of acquisition-related intangible (from acquiring Xilinx), is a non-cash expense AMD has to deduct every quarter which makes its GAAP operating margin exceedingly low. I don’t consider it as a real expense. I didn’t say the stock based compensation.
@@TheIntelligentInvestor You included SBC in your red frame, so I assumed that you are talking about both, since both affect gaap and non gaap operating income. And this does not change the fact that SBC is extremely high relative to FCF. Compare this to Nvidia. Sorry for any misunderstanding...
No problem, I do agree about the SBC part.
No problem I do agree about the SBC part. Btw, I also own Nvidia:)
@@TheIntelligentInvestor Nonetheless I do enjoy your deep dives very much! Keep going!