Is Advanced Micro Devices, Inc. (AMD) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $508.58, Advanced Micro Devices, Inc. (AMD) trades 138% above TickerWorth's blended fair value of $213.88 per share. For this company that blend leans on peer multiples: our discounted-cash-flow model holds margins flat and fades growth toward a long-run rate, which systematically understates a business growing this fast, so its figure (about $122.42) is shown as a reference beside the range rather than blended into it. Our estimate sits below the market — read that as a statement about how the market prices AMD against comparable companies, not as a finding that it is overvalued on cash flow. This is an educational model, not a price target or a recommendation.
The valuation discounts Advanced Micro Devices, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 13.2%, with a long-run terminal growth rate of 2.5%. About 69% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — AMD would need sustained revenue growth of more than 25%/yr to justify today's price. We don't quote a precise figure here, because past about 25% a year the reverse-DCF stops being informative: it solves for revenue growth alone, holding margins, capital intensity and the forecast horizon fixed, so a price well above our fair value has nowhere to go but growth. The honest reading is that the price implies growth this model can't reconcile — not that we forecast it.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, AMD's modeled DCF value ranges from about $100.54 to $157.57 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Advanced Micro Devices, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of AMD's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind AMD's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $34,639,000,000 | AMD Q4/FY2025 earnings release, 8-K Ex-99.1 filed 2026-02-03; ties to FY2025 10-K (accession 0000002488-26-000018, filed 2026-02-04): Net revenue for the fiscal year ended 2025-12-27, +34% on FY2024's $25,785M. XBRL us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax in the 10-K = $34,639M, identical. Segments: Data Center $16,635M, Client $10,640M, Gaming $3,910M, Embedded $3,454M. FY2025 carries ~$440M of net MI308 export-control inventory charges (management's figure). UNCHANGED as the base; the 2026 ramp belongs in the forecast. CROSS-CHECK: 9M 2026 revenue was $35,166M, +44.3% on 9M 2025's $24,369M (Q3 2026 10-Q, accession 0000002488-26-000191, filed 2026-11-04); Q3 alone was $13,377M, +45% YoY, with Data Center nearly doubling YoY per the Q3 release. |
| Base EBIT margin | 17.2% | AMD Q4/FY2025 earnings release, 8-K Ex-99.1 filed 2026-02-03; FY2025 10-K (accession 0000002488-26-000018): THIS IS EBITA, NOT GAAP OPERATING INCOME, and that choice is the most important accounting call in the model. GAAP operating income $3,694M (10.66%) PLUS amortization of acquisition-related intangibles $2,254M ($1,031M in cost of sales + $1,223M in opex, both on the face of the income statement; the 10-K XBRL AmortizationOfIntangibleAssets tag reads $2,300M, a rounded figure) = $5,948M / $34,639M = 17.17%. Everything ELSE stays expensed: stock-based compensation $1,638M, acquisition-related and other costs $231M, the MI308 export charges. This is therefore NOT AMD's non-GAAP margin (22% for FY2025), which also strips out SBC. WHY: almost all of the amortization is Xilinx (2022, ~$49B paid in AMD stock) plus ZT Systems; it is a non-cash write-down of intangibles AMD already paid for, the shares issued for Xilinx are already in the diluted count, and it runs OFF on a filed schedule ($2,042M in 2027 falling to $1,457M in 2030). The engine holds D&A as a constant % of revenue, so keeping GAAP EBIT would bake a shrinking 2026 charge into the terminal year forever. See da_pct_revenue for the matching add-back and caveats for the IBM-method comparison. CROSS-CHECK, same derivation, 9M 2026: GAAP operating income $6,298M + amortization of acquisition-related intangibles $1,629M = $7,927M / $35,166M = 22.54%; Q3 2026 alone ($2,832M + $534M) / $13,377M = 25.16% (Q3 2026 10-Q). |
| Forecast revenue growth | 51% → 60% → 25% → 13% → 8% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. House input shared by every model in this tracker. |
| Beta | 1.60 | Assumption — normalized estimate (published 5Y-monthly beta 2.476, yfinance, 2026-10-03): Published 5Y-monthly beta is 2.476. NORMALIZED DOWN to 1.60 — GENEROUS (lowers the discount rate, raises the value), the same direction and level this tracker uses for its other AI-melt-up semiconductors (MU 1.60, SNDK 1.60, STX/WDC/SK hynix 1.50). Evidence the published figure is inflated by one event: I regressed AMD's monthly returns on the S&P 500 myself, and the same 60-month window ending 2025-12-31 gives 1.95, ending 2024-12-31 gives 1.66, ending 2023-12-31 gives 1.69; 2-year weekly is 1.82. The 2026 run (from ~$220 in early April to $634) adds ~0.5 on its own. 1.60 sits at the bottom of AMD's own pre-2026 range. Sizing: the published 2.476 gives ~$80/share; 1.80 gives ~$105. No beta closes the gap — see what_market_believes. NOT re-measured on the Q3 2026 refresh (quarterly-refresh convention, as in MA/HOOD/APP). |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with every other company in this tracker. FLAG: the drop from Year 5's 8% to 2.5% forever is abrupt for a company whose market argues it is early in a multi-year AI cycle; that is exactly where the disagreement with the price lives. A 3.5% terminal rate gives ~$125/share. Must remain well below WACC of 13.16%. |
| Diluted shares | 1,821M | Assumption — AMD Q3 2026 10-Q (accession 0000002488-26-000191, filed 2026-11-04) + estimate for customer warrants: REPORTED BASE + THE SAME STATED ADJUSTMENT AS THE FIRST BUILD. Q3 2026 weighted-average diluted shares were 1,661M (basic 1,636M; 9M diluted 1,657M); AMD guides ~1.67B diluted for Q4. That count EXCLUDES the two customer warrants, because per the Q3 10-Q 'no warrant shares had vested or become exercisable' at 2026-09-26: OpenAI (October 2025) and Meta (February 2026), EACH for up to 160M shares at $0.01. What changed in Q3: the warrants are now probable enough that AMD carries a $1.2B warrant liability and took a $1,179M non-cash charge in 9M (a $1,097M remeasurement loss sits in Q3 other income, below EBITA). THE FORECAST STILL ASSUMES THE GPU REVENUE THAT VESTS THEM, so the half-inclusion stands: 1,661 + 160 = 1,821M. LOWERS value: zero warrants gives a higher per-share figure, the full 320M a lower one (both printed by the engine at build time — see explainer). Not included: the pending all-stock World Labs acquisition — see special_cases. |
| Market price | $508.58 | Delayed quote · as of 2026-11-10 04:57 UTC |
Compare AMD with its peers
Companies people research alongside AMD
Explore more
Most undervalued stocks (per our valuation) · Undervalued Technology stocks · All valued stocks · Interactive AMD valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.