The stock market has experienced an interesting start this year. During the first weeks of 2025, technological actions in particular showed similar levels of momentum observed for many of the last two years – thanks in large part to the continuous support of the narrative of artificial intelligence (IA).
However, the euphoria stopped at the end of January after a Chinese start-up called Deepseek published a model of AI similar to the Chatgpt of Openai.
What has taken investors by surprise is that Deepseek claims to have built his AI for much less than what Openai, Anthropic, Perplexity and other AI start-ups in the United States spend. Unsurprisingly, technological actions have hated precipitately in the past two weeks. In particular, flea stocks were really shaken.
Since News of Deepseek began recovering at the end of January, the actions of Advanced micro-apparents(Nasdaq: AMD) have dropped by around 10%. Below, I will analyze certain interesting trends in the assessment of AMD and explore if it is the right time to buy actions from the chief of chip.
An evaluation metric that I find useful is the Price in the future multiple (p / e). This ratio takes into account what Wall Street analysts provide for the future profits of a company, which can help give an overview of the way in which industry experts consult the growth prospects of a company by relation to his peers.
In the table below, I summarized the P / E of the AMD and the market capitalization from the quarter last year.
Category
09/30/2023
12/31/2023
03/31/2024
06/30/2024
09/30/2024
Current
P / E shape
24.6
39.4
53.8
47.4
30.1
25.6
Market capitalization
$ 166 billion
238 billion dollars
$ 292 billion
$ 262 billion
$ 265 billion
194 billion dollars
Data source: Yahoo! Finance
The 25.6 AMD P / E striker is mainly online with the levels observed in September 2023. The main difference I see is that the company’s market capitalization has increased by around 30 billion dollars to the Course of this period of 15 months.
Image source: Getty Images.
The slide below breaks down the income and operating income of AMD for 2024. In my eyes, the most important detail of this slide is the exploitation of the company data center, because this segment is in most closely competition with Nvidia.
Image source: Relations with investors.
Last year, the activity of the AMD data center increased by 94% to 12.6 billion dollars. More importantly, the company generates a significant operating lever effect in this company, as shown in the widening of beneficiary margins. Unfortunately, the slow growth of AMD games and play units leads to the global levels and the profit levels of the company – and that is what I think that investors harass.
The proximity of the AMD p / e by September 2023 implies that analysts model a proportional increase in future benefits compared to the increase in AMD’s action during the last year. For this reason, the multiple p / e of the company remained essentially flat instead of developing.
In other words, I think that analysts model both continuous growth in data center activity And The deceleration continues through integrated games and chips – thus balancing the global image of the company. Personally, I am not completely aligned with such an approach. On a scale, I think that the acceleration of income and profits from the activity of the AMD data center will take away from the other segments that are not part of the GPU thrust.
The way I look at the enhancement of AMD at the moment is that the market seems to apply a multiple of around 10x to operating income from the data center – therefore, the value of DML has increased by around 30 billion dollars since September 2023.
I think the activities of the AMD data center have much more value than $ 30 billion in the long term. Nvidia’s calculation and networking activities are much more important than those of AMD, and investors have experienced a historic increase in Nvidia’s action during most of the last two years – adding several billions to evaluation of the company.
Considering that AMD already notes the adoption of its MI300 mi300 accelerators with cloud hyperscalers such as Microsoft and technological geomoths such as Meta-platforms (Both are Nvidia customers), I am optimistic that AMD emerges as a legitimate force in the field of the data center as soon as possible.
I now see as a lucrative opportunity to take advantage of the action of AMD prices, because I consider the assessment of the company as a massively reduced reduction compared to Nvidia in particular.
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Randi Zuckerberg, former Director of Development of the Facebook and Sister of the CEO of Meta Platforms, Mark Zuckerberg, is a member of the board of directors of Motley Fool’s. Adam Spatacco has positions in Meta, Microsoft and Nvidia platforms. The Motley Fool has positions and recommends micro advanced devices, Meta, Microsoft and Nvidia platforms. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Word’s madman has a Disclosure policy.
