12/20/24 - $amd - upside > downside at $120 taking a 1Y view

12/20/24 :: VROCKSTAR :: AMD
upside > downside at $120 taking a 1Y view

- tough call here b/c sentiment is so stretched
- thought this take was a pretty sober take on the situation and paints a really interesting angle. tl;dr that amd has something special and we've not yet seen the extent of their stretching their wings

x.com/AlphaSenseInc/status/1866871582540357740

- i'd point out at low 20s PE and PE growth in the 30-40%+ range (make up a number) and a king of x86 and starting to do cool things in asics... that's not expensive.

- looking at stock on it's SMH (semis index) pair shows it's now had about a 50% drawdown.

- where's the bottom V? i don't know. but i'd guess sub 20x PE is probably where it'd shake out and that's about 15-20% lower and puts the stock at $100. and on the upside, multi-year view, the stock should compound EPS at a pt where you'd probably realistically say it should trade at 30x next year and hold or even expand that multiple into '27. so that's probably $150 conservatively and compounding toward $200 stock by YE '27. discounted back that puts you in the >$150 but below $200 as we look into next year.

- got busy with some Jan 17 2025 110C's for about $12 bucks to force myself to go deeper on the name. and this is a rough tape, so i've been keeping my cash balance high and remain with high conviction cash generators in my book like NXT, TSM, UBER (and i remain liking META, NVDA but admittedly have been trading them pretty high frequency). of course i like GDLC, BITW too but also keeping those light. so AMD provides an interesting oppty to add the x86 factor to my top 3 semis names. let's call AMD added to my list of 4 buyable stocks TSM > NVDA > AVGO > amd. and given the move in AVGO recently it's debatable whether AMD offers better MT r/r, but the narrative/ tailwind for AVGO is certainly stronger and has the momentum factor working well for it.

what do u think?

V