We recently compiled a list of the 10 Undervalued Chip Stocks Near 52-Week Lows. In this article, we are going to take a look at where Advanced Micro Devices, Inc. (NASDAQ:AMD) stands against the other undervalued chip stocks.
Energy and EV stocks continue to be in focus as Donald Trump signs a bunch of executive orders that will have far-reaching impacts on many industries. He even revoked an executive order related to AI, though it addresses a matter that may not directly impact a company’s sales in the near term. AI stocks are going under the radar for a few weeks but with earnings season about to get into full gear, we may not have the same opportunities in a couple of weeks that we have now.
Many of the chip stocks continue to stay undervalued. The main reason is the lack of demand in the niche industries that these companies serve. But this demand will eventually shift at some point in 2025, which is what makes them so attractive to consider at this point.
We came up with 10 stocks that we believe are undervalued, near their 52-week lows, and present good investment opportunities. To come up with the 10 undervalued chip stocks that are near 52-week lows, we only considered stocks with a market cap of between $10 billion and $200 billion that hit their 52-week lows recently.
Close-up of Silicon Die are being Extracted from Semiconductor Wafer and Attached to Substrate by Pick and Place Machine. Computer Chip Manufacturing at Fab. Semiconductor Packaging Process.
A close up of a complex looking PCB board with several intergrated semiconductor parts.
Advanced Micro Devices, Inc. (NASDAQ:AMD)
AMD has nearly halved from its 52-week highs and is hovering around its 52-week lows. AMD has always played second-fiddle to Intel. However, with Intel’s recent decline, the company has become a leader in CPU technology. It now has to fulfill the same role competing against Nvidia in GPUs. So far, the company isn’t doing a good job as the stock price shows.
Things could change as AI infrastructure costs become an issue for companies. Nvidia has the better technology at a much higher price tag. AMD makes weaker GPUs that are more cost-effective for small and medium tech companies. As a result, the total cost of ownership of AMD infrastructure for training AI models is quite low, which is why companies opt for its GPUs.
At current levels, the stock is undervalued. It may be true that the market is not confident in AMD’s ability to dent Nvidia’s market share but it doesn’t need to do that to gain a good chunk of future AI spending. Its GPU part of the business will continue to stay relevant as companies continue to set up cheaper training and inference clusters. Moreover, using AMD GPUs in combination with Nvidia GPUs is also something businesses can consider to bring down their total costs. At 24 times its forward earnings estimates, the stock is a steal.
Overall AMD ranks 1st on our list of the undervalued chip stocks near 52-week lows. While we acknowledge the potential of AMD as a leading AI investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as AMD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
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