So, AMD hit $252.92 a share. Let that sink in. Up nearly 60% in a month. Doubled this year. Everyone who bought in is patting themselves on the back, checking their Robinhood accounts every five minutes, and probably planning to buy a boat. Good for them.
Me? I’m looking at the same chart, and I just feel a pit in my stomach.
I keep getting emails and DMs from people asking if it’s too late to get in. They see a rocket ship and want a ticket, echoing the central question on Wall Street: Can AMD’s Rally Continue After a 58.6% Surge in the Past Month? But all I see is a Roman candle that’s already shot its wad, sputtering bright green sparks just before it fizzles out and falls back to Earth. The hype is deafening, a chorus of "AI is the future!" and "Don't fight the trend!" But I’m not buying it. Not a single share. And if you’re thinking about it, you need to hear why.
The Math Just Doesn't Work
Let’s get the boring part out of the way first, because numbers don't lie, but the story people tell about them sure as hell does. The Wall Street wizards who do this for a living ran a Discounted Cash Flow analysis—basically, a fancy way of figuring out what a company is actually worth based on the cash it’s expected to make. Their number for AMD? About $166 a share.
We are currently trading at a 52% premium to that.
Let me translate that from spreadsheet-ese into plain English. Buying AMD today is like walking into a used car lot, seeing a 2018 Honda Civic with a sticker price of $30,000, and saying, "Sounds great, I'll take it!" while the salesman tries to hide his grin. You’re not paying for the car; you’re paying for the story about the car. You’re paying for the hype.
And what a story it is. The company’s free cash flow last year was about $4.1 billion. Solid. But the geniuses with the crystal balls are forecasting that it’ll hit nearly $19 billion by 2029. Sure. And I’m forecasting that I’ll have a full head of hair and a six-pack by Christmas. It’s a nice thought, but it’s based on a straight-line projection into a future that’s anything but. This is wishful thinking. No, "wishful" doesn't cover it—this is financial fan-fiction written by people who already own the stock.
What happens if there's a hiccup? A supply chain disruption? A new competetive threat? What if the AI boom cools off even slightly? That $19 billion dream evaporates, and the stock price follows it right down the drain. Are we just supposed to ignore decades of valuation principles because the word "AI" is involved?

A Gold Rush Full of Shovel Salesmen
The entire bull case for AMD rests on one simple idea: the AI gold rush is here, and AMD sells the shovels. It’s a compelling narrative, I’ll give them that. It worked wonders for Nvidia. But here’s the thing about gold rushes—they attract a lot of other people who want to sell shovels, too.
The market is already "re-evaluating AMD's competitive positioning amid new entrants." That’s a polite way of saying that the party is about to get crowded. We’re not just talking about Intel waking from its decade-long slumber. We’re talking about AMD’s biggest customers—Amazon, Google, Microsoft—all pouring billions into designing their own custom AI silicon.
Why would they pay AMD’s markup forever when they can design chips perfectly tailored to their own data centers and cloud platforms? They won’t. They’re building their own shovels. This isn't some distant threat; it's happening right now. What does AMD's spectacular growth story look like when its three largest potential clients become its three largest competitors? It doesn't look like a $252 stock, I can tell you that.
This whole thing feels like the dot-com bubble all over again, just with more complex acronyms. Every company is an "AI company" now. My toaster will probably release an AI-powered firmware update next week that promises to optimize my bagel’s browning pattern. It’s noise. It’s hype. And the market is drunk on it. They're pricing AMD not as a company, but as a religious belief. They’re banking on this endless, exponential growth in compute demand, and maybe they're right, but the idea that AMD will capture a huge slice of that pie without a brutal, margin-crushing war is just... naive.
Then again, maybe I'm the crazy one. I was cynical about Tesla at $200, too. Maybe this really is a new paradigm, and the old rules don't apply. But I’ve seen this movie before. I saw it in 1999. I saw it with crypto in 2021. The ending is always the same for the people who show up late to the party.
So Go Ahead, Chase That Rocket
Look, I’m not a financial advisor. I’m just a guy who’s seen enough hype cycles to know what they smell like. And this one smells like desperation. It’s a momentum trade, not a fundamental investment. It’s a bet that you can find a "greater fool" to buy your shares at an even more ridiculous price before the music stops.
The company itself is fine. Lisa Su is a phenomenal CEO. They make great products. But a great company and a great stock are two completely different things. At $165, AMD is a great stock. At $252? It’s a lottery ticket.
I might be wrong. The stock could go to $400. The people buying today could all make a fortune and laugh all the way to the bank. But I won't be one of them. Because I'm not investing in a story. I'm investing in value. And right now, the value just ain't there. I’d rather miss out on a few more percentage points of upside than risk getting cut in half when this fever finally breaks. You can have the hype; I’ll stick with reality.
