QS Research · Michael Burry's Scion Capital analyst template · 2006
ADVANCED MICRO DEVICES INC (AMD)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -46% · downside -69% · upside +24%
AMD is a real AI share gainer - Q3 FY2026 revenue was $13.377B, +45% y/y, with Data Center $8.546B, +97% - but at $444.59 the market already pays a $729.17B market cap and $720.47B EV, or 84.1x TTM EBITDA, 95.7x P/E and a 1.0% FCF yield (N24, N26, N28, N29). My base case applies 45x - above the 20x-35x peer band but far below today's 84.1x - to TTM EBITDA of $8.57B: 45 x 8.57 = $385.65B EV + $15.78B cash - $7.08B debt = $394.35B / 1.64009B shares = about $240, or -46%. Downside uses 25x: 25 x 8.57 = $214.25B EV + net cash = $222.95B / 1.64009B = about $136, or -69%. Upside gives AMD credit for a repeat of the FY2025 +31% step-up (TTM EBITDA to about $11.2B) but still de-rates to 80x: 80 x 11.2 = $896B EV + net cash = about $905B / 1.64009B = about $552, or +24%. The growth is not the issue; the price is, and the rule supports a short: base below -30% with upside inside +25%.
Key numbers
- Share price: $444.59
- Market cap: $729.17B
- Latest financial period: TTM to Sep 26, 2026
- Revenue (TTM): $45.44B
- EV / EBITDA (TTM): 84.1x
- P/E (TTM): 95.7x
- Price / book: 10.66x
The 15 boxes
- ✓ 1. Long-form business notes
AMD is a fabless x86/GPU/adaptive-silicon designer that has re-based itself around the Data Center: FY2025 revenue was $34.64B versus $9.76B in FY2020, with FY2025 gross profit of $17.15B, operating income of $3.69B and operating cash flow of $7.71B. It reports three segments (Data Center; Client and Gaming, merged in Q1 FY2025; Embedded), sells through OEMs, hyperscalers, ODMs and distributors, and outsources all wafer fabrication and assembly/test. The FY2020 report on file describes a company still awaiting the Xilinx close, whereas the FY2025 report describes an AI-accelerator franchise with an October 2025 OpenAI agreement for 6 gigawatts of AMD GPUs, plus the ZT Systems design acquisition and the sale of ZT Manufacturing to Sanmina. Earnings quality needs care: in FY2020 and FY2023 net income ($2.49B and $854.0M) exceeded operating income ($1.37B and $401.0M), and the sources do not break out the non-operating items that caused the gap.
- ✓ 2. Competitive advantage
The sources support only a narrow, product-cycle advantage: AMD is the market-share leader in semi-custom game consoles, but it competes with Intel and Nvidia, who the 10-K says have stronger positions and resources in places and use pricing and ecosystems aggressively. FY2025 operating income was $3.69B on $34.64B revenue and operating cash flow was $7.71B, but operating income fell to $401.0M in FY2023, so the margin record is cyclical rather than a stable moat. AMD relies on TSMC/GF for wafers and a small number of customers, so no cost, network, or switching-cost advantage is evidenced.
- ✓ 3. 10-Q takeaways
Q3 FY2026 (quarter ended 2026-09-26) revenue was $13.377B, +45% YoY, led by Data Center $8.546B (+97%) while Gaming fell 40%; gross margin was 54% vs 52%. Operating income was $2.832B vs $1.270B, while reported net income of $2.4B included a $555M tax benefit and a $902M other-expense hit mainly from a $1.1B warrant fair-value change. Cash was $15.8B at 2026-09-26, up from $10.6B at 2025-12-27, but commitments and guarantees are large; the excerpt gives no quantitative Q4 revenue/EPS guidance.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.