Here's Why AMD Investors Should Consider Selling Before Nov. 3
Key PointsAMD's valuation has gotten out of control.
AMD stock has surged 150% this year, making it one of the top-performing S&P 500 stocks. However, the article suggests that this performance may not be as strong as it seems and could lead to a pullback before the company's Nov. 3 earnings report. The stock is currently trading at a high multiple of 140 times trailing earnings, which is expensive even at 70 times this year's earnings.
Analysts expect a significant increase in AMD's revenue next year, but this projected growth may not justify the stock's current premium over Nvidia. In fact, Nvidia is currently cheaper than AMD's projected price at the end of next year. This pricing mismatch between the two companies in the data center market is a concern, as it could lead to a significant sell-off of AMD stock.
Additionally, AMD's non-data center business units have been underperforming, dragging down the overall financial health of the company. In contrast, Nvidia has shown strong growth in both data center and overall revenue, making it a more appealing investment at its current price. The article recommends that investors consider selling AMD stock before the Nov.
3 earnings report and investing in Nvidia instead, as the indicators suggest that this could be a major trend in 2027.
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