AMD

We rate ADVANCED MICRO DEVICES INC (AMD) as a Hold with a composite score of 54.6/100 at a current price of $214.23. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (65th percentile) and value (59th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (39th percentile) and stability (44th percentile) tempers our overall conviction. We assign a Narrow Moat rating (58/100), High uncertainty, and Standard capital allocation.

Key items to watch: sustainability of the current growth rate. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

ADVANCED MICRO DEVICES INC holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 54.6/100 places it at rank #1325 in our full 7,333-stock universe. As a mega-cap company with a $258.8B market capitalization, ADVANCED MICRO DEVICES INC benefits from significant scale, distribution networks, and brand recognition that smaller competitors cannot easily replicate.

The near-term outlook is constructive, with revenue growing at 58% and momentum in the 65th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 39th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 48% (+5.5pp vs sector) narrow to operating margins of 8% (+7.1pp vs sector) and net margins of 11.4%, yielding a gross-to-net conversion rate of 24%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.

At a current price of $214.23, ADVANCED MICRO DEVICES INC is trading near fair value based on current fundamentals. Our value factor score of 59/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 90.8x (a 308% premium to the sector median of 22.3x), EV/EBITDA of 122.4x (at a premium), P/B of 5.2x, P/S of 10.5x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a High uncertainty rating to ADVANCED MICRO DEVICES INC. Key risk factors include elevated market sensitivity (beta of 2.01), elevated valuation multiple (P/E 90.8x) that leaves limited margin for error. The wide range of potential outcomes widens our fair value estimate and increases the possibility of permanent capital impairment. Investors considering this name should size positions accordingly and demand a meaningful margin of safety before initiating.

Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 2.01); elevated valuation multiple (P/E 90.8x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 44th percentile and quality factor at the 57th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: healthy gross margins of 48% provide a buffer against cost pressures; conservative leverage (22% D/E) limits balance sheet risk; large-cap scale ($258.8B) provides resilience. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile warrants caution and disciplined position management.

We rate ADVANCED MICRO DEVICES INC's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 5.7%, and the balance sheet is managed within acceptable parameters (D/E: 22%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; ADVANCED MICRO DEVICES INC falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, ADVANCED MICRO DEVICES INC receives a Hold rating with a composite score of 54.6/100 (rank #1325 of 7,333). Our quantitative framework assigns a Narrow Moat (58/100, trend: stable), High uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 53/100.

Our analysis supports a neutral stance on ADVANCED MICRO DEVICES INC. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.