Parkev Tatevosian, CFA on $AMD (Oct 29, 2026)

AMD's stock fell 16% last month after rising to more than $650 per share. The company is scheduled to announce its quarterly financial results after the markets close on November 3, 2026 , and investors are asking me if this is a buying opportunity when the price is low before those financial results are announced.

I will also review what investors should expect from the company according to AMD's own forecasts, and my opinion on how things have gone since the last quarterly financial results announcement, as a lot of data has come out since AMD's last report.

So, AMD announced its latest results on August 4, stating that its data center revenues more than doubled year-over-year. This sector is the engine of AMD's overall results, and it is the data center business.

AMD was late to the scene, and Nvidia was the first to take advantage of data centers. AMD came later. 2026 was a very positive year, with the proliferation of agentic AI leading to AMD being ranked as one of the top competitors in this field.

The proliferation of artificial intelligence has made the central processing unit (CPU) a more important part of data centers, and this is where AMD excels. It may not be able to compete with Nvidia in graphics processing units (GPUs), but in central processing units (CPUs), it is arguably the market leader with a product that is best in its class.

Total revenue rose by 50% in the last quarter, as the rest of the company's business is not growing at the same pace as its data center business.

But profits are also soaring, with operating income jumping to $2 billion after a loss of $134 million in the same period last year. The operating margin jumped to 17% after being -2%.

But if we compare its operating profit margin of 17% with Nvidia, we find that Nvidia is far ahead with an operating profit margin exceeding 65%.

For the third quarter , AMD expects revenue of approximately $13 billion with a gross profit margin of approximately 56%. Now, if I were a gambler, I would bet that AMD's revenue would exceed $13 billion.

In fact, it will exceed $13.3 billion because the company has set aside a safety margin of $300 million. I believe the company will achieve better results even with this margin of safety.

I think its revenue will be closer to $14 billion, and perhaps closer to $15 billion than to $13 billion. This is because the data I 've seen from other participants in the AI market indicates that demand is stronger than we thought three months ago.

Therefore, AMD stock is now trading at a forward price-to- earnings ratio of 33.6. To put this figure in context, it is twice as expensive as Nvidia stock .

This is one of the reasons why I warned investors a little over a month ago that AMD stock had become too expensive, and we downgraded its rating to "hold". For most of the past few years, I have rated AMD stock as a "buy".

I was optimistic about the company , and I predicted its success several years before anyone else even started to see its opportunity.

What I said was that companies were not comfortable giving Nvidia too much dominance in this sector, and I said that AMD would gain market share simply because many of these companies would want an alternative to Nvidia in this area.

However, the need for an alternative is diminishing because companies like Amazon and Alphabet have their own powerful chips, GPUs and CPUs, and are increasing their investments in these categories.

If there must be an alternative , or if they want an alternative to Nvidia, it is reasonable to assume that they will want to promote their own chips.

Using my model, I calculated a fair value for AMD stock at $394 compared to its market price of $531. Therefore , I still believe that AMD stock is overvalued even after the stock price has dropped.

Of course, these evaluation models are what helped me identify AMD stock in the first place and recommend it to all viewers several years ago. The stock price has risen significantly since then .

But these are the same models that identified AMD stock as overvalued about a month ago , and the stock has fallen 16% since it was identified as overvalued. Therefore, these models have worked relatively well in identifying opportunities with AMD.

To answer the question investors are asking me: Do I think AMD stock represents a buying opportunity at this low point before the company announces its financial results? I would say no.

I am relatively confident in an average level of conviction in this classification. AMD stock seems overvalued, and its valuation appears exaggerated. If I am interested in buying AMD stock, I will wait until the company announces its quarterly financial results and then make my decision .