Key Takeaways
- AMD stock fell 11.7% and Intel 10.8% in the past week (through Tuesday’s close), as chip stocks sold off on worries about how AI data centers get financed.
- AMD is more exposed to that worry than most chipmakers because it backs some of its customers’ deals, including Fermi’s lease and up to $5 billion for Anthropic.
- Analysts’ earnings estimates held through the week, but the stock still trades at 48x forward earnings, against a five-year average of 35x.
- Third-quarter results on Nov. 3 should show whether shipments toward OpenAI’s first gigawatt have begun.
Advanced Micro Devices (AMD) is down 11.7% in the past week (through Tuesday’s close), and Intel (INTC) lost 10.8%, as Wall Street started asking who pays for the AI build-out.
AMD itself didn’t put out a word of news.
Two bad days did the damage
Nearly all of AMD’s drop came in two sessions: Wednesday’s 5.7% fall, after a sell-off in CoreWeave’s bonds stirred up fears about AI spending, and Friday’s 6.0%, when all 30 stocks in the Philadelphia Semiconductor Index closed lower. Intel fell on both days too.
AMD had more than tripled from its March low to its Oct. 6 record close. On Wednesday’s Mad Money, CNBC host Jim Cramer said of runs like that: “Now we’re finding that maybe these moves were too big too fast.”
Investors don’t love the “bank of AMD”
By Thursday, the worry was who can keep financing the data centers, and AMD sits closer to that question than most chipmakers. Baird tech strategist Ted Mortonson said on Bloomberg Surveillance: “My clients, they hate the bank of AMD, the bank of NVIDIA, and the bank of Broadcom.”
On Oct. 13, AMD agreed to stand behind the lease on Fermi’s 222 MW Texas campus. It has also pledged up to $5 billion to Anthropic and handed OpenAI and Meta warrants for up to 160 million shares apiece. Each deal sells chips, and each ties AMD’s stock to its customers’ funding.
TIKR tracks 55 analysts on AMD. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on AMD, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See AMD’s Analyst Ratings
Analysts aren’t cutting numbers
Analysts still see AMD’s EPS roughly doubling, from $7.59 this year to $15.76 in 2027.
(That 2027 figure is up from $15.72 on Oct. 7.) KeyBanc and Wedbush reiterated Buy ratings this week.
Cheaper, but still priced for a lot
AMD traded at 48.4x forward earnings on Monday, down from a June peak of 66.6x…
…but still well above its five-year average of 34.5x. The Street’s $636 consensus target sits roughly 19% above Tuesday’s close.
Nov. 3 is the real test
AMD reports third-quarter results after the close on Tuesday, Nov. 3. Watch whether shipments toward OpenAI’s first gigawatt have started.
My take: Cramer had a point about the price, and this week fixed some of it. With estimates holding, AMD looks a lot more reasonable than it did two weeks ago.
Of course, AMD leans on three big buyers, and if one slows its build, its steepest growth years slip.
So what is AMD stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what AMD could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
