AMD at $1T trades richer than NVIDIA on both multiples — analyst warns of a stall, 320M warrants loom
pdamodaran · x · 2026-10-10
Investor Prakash Damodaran publishes a deep analysis of AMD's $1 trillion valuation after a 180% run, disclosing he still holds a sizable (but reduced) position. Base case: a year of digestion — good quarters, flat stock. "A stall, not a short."
- AMD trades at 25x trailing sales and 160x trailing GAAP earnings — richer than NVIDIA on both, with roughly half the gross margin
- Business is genuinely accelerating: record Q2 2026 revenue of $11.5B (+50%), data center up 107% to $6.7B (58% of company); Lisa Su guides DC revenue to more than double again in 2027
- OpenAI (up to 6GW Instinct) and Meta (another 6GW) deals are contracted demand, not design-win hype
- But 320M warrant shares (a fifth of the company) vest as OpenAI and Meta take delivery, and the stock already prices in $13.57 consensus EPS for 2027
- NVIDIA comparison is brutal: $215.9B FY2026 revenue (+65%), $303B TTM, quarterly profit ($59.7B) larger than AMD's quarterly revenue
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