AMD: Expensive, But Growth Is Still Fast Enough To Keep The Bull Case Alive

AMD is rated Buy, despite its high valuation, because current AI and Data Center growth remain fast enough for earnings to potentially catch up with the stock price. Major AI infrastructure buyers have a sufficiently large revenue base and continue to increase AI-related capital spending, supporting the long-term size of the market AMD is targeting. At a 28.5x P/E reference based on NVIDIA's current trailing multiple, one path to supporting AMD's roughly $630 share price is about 45% annual revenue growth combined with a 40%.