Is AMD Stock a Buy Now?
Advanced Micro Devices (NASDAQ: AMD) stock has rallied strongly in 2023 and gained nearly 50% as of this writing, which explains why shares of the chipmaker are now trading at a substantially rich valuation even as the company faces headwinds in key areas.
More specifically, AMD is now trading at a whopping 114 times trailing earnings, which is well above its five-year average price-to-earnings ratio of 89. Of course, there are a few reasons why the chipmaker may be able to justify its rich valuation and deliver more upside, but does it make sense for investors to buy this semiconductor stock at its current multiples, especially considering the challenges it is set to face? Let's find out.
AMD's first-quarter 2023 results are still a month away, but there is a big headwind that investors should note, as it could bring the company's hot stock market rally to an end. Weak sales of personal computers (PCs) weighed heavily on AMD's financial performance in the fourth quarter of 2022, leading to a 51% year-over-year revenue decline in the client segment.
Source Fool.com
