Our model shows that AMD is 18% undervalued, and the cash flows yield a fair value per share of US$140 or a total value of US$228.4b.
AMD ($93.50) is not significantly undervalued (6.53%) relative to our estimate of its Fair Value price of $100.03 based on Discounted Cash Flow (DCF) modelling, when including a healthy margin of safety.
Intel WACC - Weighted Average Cost of Capital
The WACC of Intel Corp (INTC) is 7.8%. The Cost of Equity of Intel Corp (INTC) is 8.7%.
Income investors may have missed the exceptional returns of AMD, as the company does not pay a dividend. This is fairly common among growth stocks, particularly those in the technology sector, as it is much more profitable to reinvest the earnings in the business than to distribute them to the shareholders.
Here we can see that when it comes to AMD vs Intel HEDT CPUs, AMD holds the uncontested lead with 64 cores and 128 threads in its flagship Threadripper 3990X, and the 32- and 24-core Threadripper 3970X and 3960X models cement the overwhelming lead over Intel's chips.
NVIDIA WACC - Weighted Average Cost of Capital
The WACC of NVIDIA Corp (NVDA) is 7.7%. The Cost of Equity of NVIDIA Corp (NVDA) is 7.75%.
Using the capital asset pricing model (CAPM) to determine its cost of equity financing, you would apply Cost of Equity = Risk-Free Rate of Return + Beta × (Market Rate of Return – Risk-Free Rate of Return) to reach 1 + 1.1 × (10-1) = 10.9%.
Since AMD is currently undervalued, it may be a great time to increase your holdings in the stock.
We think AMD benefits from intangible assets related to its x86 instruction set architecture license and chip design expertise. This gives us confidence that the company will generate excess returns over the cost of capital over the next decade, thus warranting a narrow economic moat rating.
Furthermore, AMD is projected to demonstrate higher forward revenue and EBITDA growth rates of 44.08% and 74.33%, respectively. These growth numbers exceed the NVDA respective figures by 28% and 59%. I believe that AMD is a better investment than NVDA at these levels.
Advanced Micro Devices (NASDAQ:AMD) shares are not off to the kind of start that would suggest a repeat of 2020, or 2021. For example, AMD stock delivered a 150% return in 2019. (That was the year it was the top performer among the S&P 500). So far in 2022, AMD shares are off 24%.
AMD was an “outstanding, long-term (one year) investment” that its stock price could rise to $139 by April 2023, according to the algorithm-based forecasting site Wallet Investor at the time of writing (12 April). It had the stock reaching $118 in 2024 and then $216 by April 2025.
What Is NVIDIA's Net Debt? The image below, which you can click on for greater detail, shows that at January 2022 NVIDIA had debt of US$10.9b, up from US$6.96b in one year. However, its balance sheet shows it holds US$21.2b in cash, so it actually has US$10.3b net cash.
Institutional investors hold a majority ownership of INTC through the 63.78% of the outstanding shares that they control. This interest is also higher than at almost any other company in the Semiconductors industry. Last, during the quarter ended June 2019, these large investors purchased a net $40.0 million shares.
Intel (INTC) has 6 splits in our Intel stock split history database.
So, what is a good PE ratio for a stock? A “good” P/E ratio isn't necessarily a high ratio or a low ratio on its own. The market average P/E ratio currently ranges from 20-25, so a higher PE above that could be considered bad, while a lower PE ratio could be considered better.
Advanced Micro Devices, Inc.
(AMD) is an American multinational semiconductor company based in Santa Clara, California, that develops computer processors and related technologies for business and consumer markets.
The company's most advanced node today is 7nm, or N7, which is used across AMD's Ryzen and Navi range, but soon it will be shifting to 7nm+ (N7+), 5nm (N5), and then onto 3nm (N3).
The current Approach of AMD seems to use the same chip design excluding APUs and mobile potentially). This means the highest-end epyc will have the same CCD(Core compute die) as of lower-end ryzen. As a result, the R / D costs for AMD are lower and much cheaper due to less manufacturing design.
Market cap: $150.14 Billion
As of May 2022 AMD has a market cap of $150.14 Billion. This makes AMD the world's 73th most valuable company by market cap according to our data.
AMD boasts a Growth Style Score of B and VGM Score of B, and holds a Zacks Rank #3 (Hold) rating. Its bottom-line is projected to rise 55.6% year-over-year for 2022, while Wall Street anticipates its top line to improve by 54.4%. 11 analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022.