1 Reason to Buy Advanced Micro Devices Stock

Shares of Advanced Micro Devices (NASDAQ: AMD) pulled backmost to commencement 2026 and were precocious down astir 8% twelvemonth to date, though the banal has recovered. Investors are weighing the stock's precocious price-to-earnings aggregate against risks successful the AI spot market, wherever it is simply a distant 2nd to Nvidia's leadership.

However, investors mightiness beryllium overlooking AMD's surging escaped currency travel and what this says astir the existent spot of the company's business.

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AMD's escaped currency travel astir doubled twelvemonth implicit twelvemonth to $2.1 cardinal successful the 4th quarter. This brought its full-year escaped currency travel from continuing operations to a grounds $5.5 billion, which followed the company's surging information halfway revenue.

During the fourth-quarter net telephone with analysts, CEO Lisa Su credited the company's gross and escaped currency travel to "broad-based request for high-performance computing and AI products." The institution reported a 34% year-over-year summation successful revenue, with adjusted nett income up 42% -- besides hitting a grounds of $2.5 billion.

While AMD faces risks competing successful the AI spot market, the surging escaped currency travel reflects a concern that mightiness beryllium much competitively positioned than is priced into the stock. The shares are trading astatine 42 times 2026 free-cash-flow estimates, but that valuation aggregate drops to 16 connected 2028 estimates.

AMD's upcoming information halfway products, specified arsenic its Helios computing level for AI workloads, could prolong maturation successful higher-margin products that prolong its escaped currency travel momentum, making the banal a rewarding concern implicit the adjacent respective years.

Before you bargain banal successful Advanced Micro Devices, see this:

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