Signal Ledger LabSignal Ledger valuation · AMD
Advanced Micro Devices Inc
What the shares are worth today on our research (management’s own targets for each business, plus our judgment calls): every line valued at the end of FY2030, net debt rolled forward, then discounted back to Jun 27, 2026.
- Business value at FY2030
- $1,241B
- FY2030 revenue
- $203B
- FY2030 EPS · P/E
- $36.27 · 23×
- Discount rate (WACC · equity)
- 8.97% · 9.00%
What each business is worth
| Business | Model | FY2030 revenue | Value today | Per share | 2030 multiple | Value from beyond FY2030 |
|---|---|---|---|---|---|---|
| Data Center | Margin | $174B | $1,024B | $627.34 | 19.6× EBIT | 73% |
| Client and Gaming | Margin | $23B | $67B | $41.21 | 14.4× EBIT | 62% |
| Embedded | Margin | $5.6B | $28B | $17.21 | 14.9× EBIT | 62% |
| Company costsHead-office costs no segment carries, valued as one negative business | Cost line | — | −$186B | −$114.13 | — | 71% |
| All businesses | $203B | $933B | $571.63 |
Our judgment calls
Where the evidence leaves room for judgment, we make the call ourselves and say why (Signal Ledger, Oct 17, 2026). These 2 calls are part of the valuation above; every other input follows the research file and the published rules.
| Assumption | Our call | Why |
|---|---|---|
| Discount rate (cost of equity) | 9.0% | AMD is treated as market-average risk (beta about 1) rather than at the 1.2 beta cap that sets 10% for high-beta tech: 3.85% normalised risk-free rate + 1.0 × 5% equity premium ≈ 9%. |
| Data Center: FY2030 operating margin | 40.0% | Data Center operating margin was 29.6% in H1 2026 and 31.3% in Q2 2026, and AI-accelerator peers earn far more (NVIDIA Compute & Networking ~67% in FY2026). 40% by FY2030 assumes scale and Instinct GPU mix lift it about 4 points above what management's >35% company margin target implies. |
From 2030 back to today
- Enterprise value at end of FY2030$1,241B
- Plus net cash at FY2030$132B
- Equity value at FY2030$1,374B
- ÷ (1 + 9.00%)^4.5 years at the cost of equity$931B
- + dividends paid on the way, discounted$0B
This reconciliation checks the published Signal Ledger valuation against the net-debt path. The difference is 1.3%, inside our 5% tolerance.
From businesses to one share
- All businesses, valued today$933B
- − borrowings$3.2B
- − finance leases$0B
- + cash and short-term investments$13B
- ÷ diluted shares1.632B
- Signal Ledger valuation$577.68
Year by year to FY2030
| Fiscal year | Revenue | EBITDA | Capex | Free cash flow | Net debt at year end |
|---|---|---|---|---|---|
| FY2026 | $49B | $8.7B | $1.4B | $6.3B | $13B cash |
| FY2027 | $68B | $14B | $1.9B | $11B | $24B cash |
| FY2028 | $96B | $24B | $2.7B | $18B | $43B cash |
| FY2029 | $138B | $40B | $3.9B | $31B | $76B cash |
| FY2030 | $203B | $68B | $5.7B | $54B | $132B cash |
What must be true
- Data Center grows revenue from $29.1B in FY2026 to $174.4B in FY2030 (6.0×).
- Client and Gaming grows revenue from $16.5B in FY2026 to $23.4B in FY2030 (1.4×).
- Embedded grows revenue from $3.9B in FY2026 to $5.6B in FY2030 (1.4×).
- Data Center raises its EBIT margin from 21.7% to 40.0%.
- Client and Gaming raises its EBIT margin from 19.6% to 23.6%.
- Embedded raises its EBIT margin from 36.0% to 40.0%.
- The company spends $15.5B of capital expenditure through FY2030.
- The company stays net cash throughout (lowest point $9.9B of net cash in FY2025).
What the price implies
At our discount rate, the price assumes less than our research overall: one combination matching $507.93 is about $177.9B of FY2030 sales (growth of about 37.7% a year from FY2026) with 38.1% GAAP EBIT margin — versus $203.4B and 38.1% GAAP EBIT margin in our research.
At the research price of $507.93 (2026-10-23), the price asks less than our assumptions overall. These are operating requirements at that price, not additional valuations or forecasts.
If sales and margins changed together
Each row matches the same research price at our unchanged discount rate, by scaling every operating line's margin by one common factor. Sales cover margin and capacity lines only; other valuation lines stay fixed. Margins are revenue-weighted within each metric, before separately modeled corporate costs and eliminations. The conclusion uses the row at our research margins when sales alone can match the price, otherwise the solved row needing the least sales growth; this is a trade-off between growth and profitability, not a forecast.
| FY2030 sales factor | FY2030 sales | FY2026–30 CAGR | Required FY2030 margin | Requirement |
|---|---|---|---|---|
| 0.87×At research margins | $177.9B | 37.7% | 38.1% GAAP EBIT | Within margin guardrails |
| 1.50× | $305.1B | 57.6% | 25.6% GAAP EBIT | Within margin guardrails |
| 2.00× | $406.9B | 69.3% | 21.1% GAAP EBIT | Within margin guardrails |
| 3.00× | $610.3B | 87.4% | 16.6% GAAP EBIT | Within margin guardrails |
CAGR uses $49.5B of same-scope FY2026 sales from the published model or its sourced research base, over four fiscal years. “Within margin guardrails” checks numeric limits only, not commercial plausibility. Each line and year must stay at or below 50.0% GAAP EBIT and 100% EBITDA, or our research margin where that is higher; capacity EBIT uses the engine's equipment depreciation. Unsolved margins are not extrapolated.
- Implied discount rate
- 9.7%
- All-business FY2030 sales factor
- 0.87×
The WACC that makes model value equal the price, shifting WACC and cost of equity by the same amount. Model: 9.0% WACC · 9.0% cost of equity.
FY2030 revenue would need to reach $177.9B (model: $203.4B) across the margin and capacity businesses. FY1 stays fixed; the sales change ramps to FY2030 and stays at that factor thereafter.
If only one business changed
Businesses with margin or capacity revenue paths, ordered by value today. Revenue and margin are separate alternatives; these requirements are not added together.
Data Center
- Revenue alone
- FY2030 revenue would need to reach $151.4B (model: $174.4B).
- Margin alone
FY2030 EBIT margin would need to reach 35.7% (model: 40.0%).
Client and Gaming
- Revenue alone
- This business alone cannot get there within the search range.
- Margin alone
- This business alone cannot get there within the search range.
Embedded
- Revenue alone
- This business alone cannot get there within the search range.
- Margin alone
- This business alone cannot get there within the search range.
Mechanical requirements, not forecasts. The separate sales-only and single-business factors are searched from 0.1× to 6×; an unsolved comparison means this business alone cannot get there within those bounds. Single-business revenue changes apply from FY2 onward; margin changes scale the full EBIT or EBITDA margin path. Mixed groups show revenue-weighted EBIT and EBITDA margins separately. Requirements above 100% are not feasible margins. Joint rows instead search non-negative uniform margin factors only up to the EBIT/EBITDA guardrails; the entire margin path scales, including post-FY2030 convergence. Sales and margins change together only in that table. The rate search runs from the largest terminal growth rate plus 0.5 percentage points to 30% WACC.
The discount rate
- Cost of equity
- 9.00%
- WACC
- 8.97%
Signal Ledger judgment: AMD is treated as market-average risk (beta about 1) rather than at the 1.2 beta cap that sets 10% for high-beta tech: 3.85% normalised risk-free rate + 1.0 × 5% equity premium ≈ 9%.
Signal Ledger judgment: AMD is treated as market-average risk (beta about 1) rather than at the 1.2 beta cap that sets 10% for high-beta tech: 3.85% normalised risk-free rate + 1.0 × 5% equity premium ≈ 9%.
Every input, with its source
Show 25 inputs · reported, guidance and rule-based
| Input | Value | Basis | Why |
|---|---|---|---|
| Revenue FY2026Data Center | $29.1B | Rule | target (methodology §4.2), growth 74.9% amd.com ↗ |
| Revenue FY2030Data Center | $174.4B | Guidance | target (methodology §4.2), growth 56.5% amd.com ↗ |
| EBIT margin FY2030Data Center | 40.0% | Rule | Signal Ledger judgment: Data Center operating margin was 29.6% in H1 2026 and 31.3% in Q2 2026, and AI-accelerator peers earn far more (NVIDIA Compute & Networking ~67% in FY2026). 40% by FY2030 assumes scale and Instinct GPU mix lift it about 4 points above what management's >35% company margin target implies. Our judgment calls · Read methodology ↗ |
| Maintenance capexData Center | 2.8% | Reported | fabless companyAnnual FY2025: capex $0.974B ÷ revenue $34.6B |
| Terminal growthData Center | 3.0% | Rule | methodology §4.2 terminal growth for a growth line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026Client and Gaming | $16.5B | Reported | target (methodology §4.2), growth 13.5% AMD Financial Analyst Day 2025-11-11: Client and Gaming revenue CAGR >10% |
| Revenue FY2030Client and Gaming | $23.4B | Guidance | target (methodology §4.2), growth 9.1% AMD Financial Analyst Day 2025-11-11: Client and Gaming revenue CAGR >10% |
| EBIT margin FY2030Client and Gaming | 23.6% | Rule | linear path to 23.6% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 10.0% to FY2030; no cited expansion evidence) Valuation methodology §4.3 · Read methodology ↗ |
| Maintenance capexClient and Gaming | 2.8% | Reported | company capex share companyAnnual FY2025 |
| Terminal growthClient and Gaming | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Revenue FY2026Embedded | $3.9B | Reported | target (methodology §4.2), growth 12.3% AMD Financial Analyst Day 2025-11-11: Embedded revenue CAGR >10% |
| Revenue FY2030Embedded | $5.6B | Guidance | target (methodology §4.2), growth 9.4% AMD Financial Analyst Day 2025-11-11: Embedded revenue CAGR >10% |
| EBIT margin FY2030Embedded | 40.0% | Rule | linear path to 40.0% by FY2030 (§4.3 E2: 4.0000 points = 4pp × clamp((CAGR − 1.5%) / 2%, 0, 1); revenue CAGR 10.0% to FY2030; no cited expansion evidence) Valuation methodology §4.3 · Read methodology ↗ |
| Maintenance capexEmbedded | 2.8% | Reported | company capex share companyAnnual FY2025 |
| Terminal growthEmbedded | 2.0% | Rule | methodology §4.2 terminal growth for a mature line Valuation methodology §4.2 · Read methodology ↗ |
| Share of revenue FY2026Company costs | 6.0% | Reported | company costs outside segment profit, cash only: rule 17: All Other mixes non-cash amortization of acquired intangibles (~$2.2B a year); cash company costs incl. stock compensation ≈ $2.1B a year ÷ trailing revenue $41.3B; grows with the lines' revenue Q2 2026 release, GAAP to non-GAAP reconciliation: stock-based compensation $503M and acquisition-related costs $40M a quarter; amortization of acquisition intangibles $544M a quarter |
| Share of revenue FY2034Company costs | 6.0% | Reported | company costs outside segment profit, cash only: rule 17: All Other mixes non-cash amortization of acquired intangibles (~$2.2B a year); cash company costs incl. stock compensation ≈ $2.1B a year ÷ trailing revenue $41.3B; grows with the lines' revenue Q2 2026 release, GAAP to non-GAAP reconciliation: stock-based compensation $503M and acquisition-related costs $40M a quarter; amortization of acquisition intangibles $544M a quarter |
| WACCDiscount rates | 8.97% | Rule | Signal Ledger judgment: AMD is treated as market-average risk (beta about 1) rather than at the 1.2 beta cap that sets 10% for high-beta tech: 3.85% normalised risk-free rate + 1.0 × 5% equity premium ≈ 9%. Our judgment calls · Read methodology ↗ |
| Cost of equityDiscount rates | 9.00% | Rule | Signal Ledger judgment: AMD is treated as market-average risk (beta about 1) rather than at the 1.2 beta cap that sets 10% for high-beta tech: 3.85% normalised risk-free rate + 1.0 × 5% equity premium ≈ 9%. Our judgment calls · Read methodology ↗ |
| Tax rateDiscount rates | 13.0% | Guidance | management's normalised rate Q2 2026 release: AMD used a non-GAAP tax rate of 13% for fiscal 2026 |
| Cash and short-term investmentsBalance sheet | $13.1B | Reported | cash, cash equivalents and short-term investments; use consolidated short-term investment total once, including all security classes sec.gov ↗ |
| BorrowingsBalance sheet | $3.2B | Reported | borrowings due within a year plus long-term borrowings us-gaap:LongTermDebtCurrent · 0000002488-26-000123 + us-gaap:LongTermDebtNoncurrent · 0000002488-26-000123 |
| Finance leasesBalance sheet | $0.0B | Reported | no finance lease liability reported balance sheet 2026-06-27 |
| SharesBalance sheet | 1.632B | Reported | shares outstanding as of 2026-07-29 cover page of 10-Q 0000002488-26-000123 |
| Dividends per yearShareholders | $0.0B | Reported | AMD pays no dividend × 1.632B shares no dividends |
Research notes
- share-count comparison: 1.659B quarter 2026-03-29..2026-06-27 · 0000002488-26-000123; point-in-time denominator retained
- unallocated company costs: $2.1B a year (5.0% of trailing revenue), growing with the lines, valued as one negative business
- cost of equity 9.87% (β 1.20 after Blume adjustment), WACC 9.8%
Signal Ledger research under one stated scenario — management's targets are delivered, with our stated judgment calls — not a forecast that they will be and not investment advice. The research desk (Claude Opus 5.5) gathers filings, guidance and targets; deterministic code applies the samepublished rules to every company and checks the result. Inputs may contain errors; follow the source links before relying on them. Read our valuation methodology →