AMD Stock: A Massive Buying Opportunity in 2024?

• Is AMD Stock Undervalued Right Now?
• Why Are Big Investors Loading Up on AMD?
• How Are AMD’s AI Deals Fueling Growth?
• What’s Next for AMD Stock?
• FAQs

Advanced Micro Devices (AMD) has taken a beating in recent weeks, with its stock price tumbling from recent highs. While retail investors panic over the red flags, the market seems to be overlooking a glaring discrepancy. New valuation models and aggressive buying by institutional investors suggest the semiconductor giant is currently trading at a bargain. Could this recent sell-off actually be a golden entry point? Let’s dive into the details.

Is AMD Stock Undervalued Right Now?

A recently published Discounted Cash Flow (DCF) analysis paints an extremely bullish picture. While the market overweights short-term risks, the calculated fair value of AMD stock stands at $393.29, according to data from Simply Wall St. Compared to the current price, this implies a theoretical undervaluation of nearly 50%. The market appears to be ignoring AMD’s long-term cash-generation potential. The model forecasts AMD’s free cash flow could surge to around $30.92 billion by 2029—a fivefold increase driven by massive expansion in data centers and AI accelerators.

Why Are Big Investors Loading Up on AMD?

The undervaluation thesis is further supported by the actions of institutional heavyweights. Despite—or perhaps because of—the recent price correction, top asset managers are aggressively accumulating shares. Recent 13F filings reveal:

• Wellington Management Group increased its position by a staggering 335.9%, buying 3.73 million shares.
• Jennison Associates added 3.87 million shares to its portfolio.
• Winslow Capital Management boosted its holdings by approximately 3.44 million shares.

This "smart money" behavior suggests institutional investors are capitalizing on retail panic to consolidate their positions.

How Are AMD’s AI Deals Fueling Growth?

Operational successes in the AI race further justify this optimism. Two key partnerships highlight AMD’s strengthening position:

• A deal involving 30,000 Instinct MI355X GPUs confirms robust demand for AMD’s latest hardware.
• A collaboration to support a massive 6-gigawatt infrastructure provides long-term planning security.

These agreements counter fears that AMD might lose ground in the AI sector.

What’s Next for AMD Stock?

Despite closing at just $176.88 last Friday, AMD’s technically oversold conditions now clash with fundamentally strong buy arguments. Investors face a critical decision: Do short-term margin concerns outweigh the volume of new AI deals and institutional confidence? With fair value estimates nearly double the current price, this gap could close medium-term. The numbers speak for themselves—AMD shareholders may need to act soon.

FAQs

Is AMD a good stock to buy now?

Valuation models suggest AMD is significantly undervalued, with a fair value estimate of $393.29. Institutional buying activity also indicates strong confidence in the stock’s long-term potential.

What’s driving AMD’s growth?

AMD’s expansion in data centers and AI accelerators, along with major partnerships, are key growth drivers. The company’s free cash FLOW is projected to grow fivefold by 2029.

Why is AMD stock dropping?

Short-term concerns over margins and high expectations from recent quarterly reports have pressured the stock. However, institutional investors see this as a buying opportunity.