📉 AMD: Questions About a 70x P/E Are Growing Ahead of Earnings - 2026.10.22

Hi, it's Peanut. Want to check the numbers together first? 📊 AMD's closing price fell to $528.75 on October 16, then climbed to $553.11 on the 21st. But it's too soon to relax just because the stock has rebounded. Valuation talk is piling up ahead of the November 3 third-quarter earnings release.

Pre-earnings jitters, with server CPUs in focus

According to GuruFocus, AMD is scheduled to report third-quarter earnings on November 3, with the focus on server CPUs ^[1]. The article doesn't provide detailed earnings figures, so what we can confirm is limited to the date and the broader trend. Until the numbers come out, expectations and questions are both up in the air.

The valuation question: Is a 70x P/E really justified?

A Seeking Alpha contributor highlighted that AMD's price-to-earnings ratio exceeds 70x and shared their view ^[2]. That's the contributor's interpretation, not information disclosed by the company. Still, a 70x P/E means earnings need to grow as expected for the valuation to hold up. If the earnings outlook falls short, the valuation may come under pressure before the stock price does. The key isn't whether it looks cheap, but whether the reasons it's expensive can continue to hold. It's also worth keeping the possibility of a value trap on the table, depending on how things unfold.

Expectations and countervailing factors

There are reports that Susquehanna raised its price target for AMD ^[3]. The direction is favorable, at least. But that's a brokerage's forecast, not a plan confirmed by the company. MarketBeat also reported that Focused Alpha LLC sold 1,791 AMD shares that day ^[5]. That's a relatively small change in holdings, so it's too early to read too much into it, but it's still good practice to keep an eye on capital flows.

The Motley Fool asked whether last week's drop could be a buying opportunity before November 3 ^[4]. The question itself captures the market's current dilemma, but I'll leave the answer to you. When a question seems too easy, that's all the more reason to be skeptical.

Product news is quietly building

AMD announced that it is expanding support for FSR Upscaling 4.1. Eligible products include the Radeon RX 6000 series, Ryzen AI Max processors, laptops equipped with Ryzen AI 9, and gaming handhelds such as those powered by Ryzen AI Z2 Extreme. Xbox Series X|S consoles are expected to receive support later ^[6]. This isn't directly tied to the earnings figures, but it's worth keeping in mind. There's also a report that performance figures for next-generation desktop Ryzen 10000 (Zen 6) have leaked ^[7]. Since this is leaked information, don't treat it as confirmed specifications; it should be taken only as a claim from the source.

Peanut's take

Rather than call this rebound a change in direction, Peanut sees it as a period when AMD's valuation is being tested ahead of earnings. Even in a bullish mood, the bearish scenario remains possible. If earnings don't confirm profits at the level the market expects, the high P/E could become a burden. The short-term trend may be choppy, but for a medium-term swing perspective, the earnings numbers need to come first before there's enough to assess.

So there's one question left: Will the November 3 earnings report show, in the numbers, that server CPU momentum is strong enough to support today's valuation? 🥜

📰 Reference News (5)

📺 Reference Videos (2)

6

YouTube

AMD FSR™ Upscaling 4.1 for Desktop, Laptop, Handheld and Console

▶AMD Gaming·2026.10.20

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YouTube

INSANITY! Zen 6 Desktop Performance Leaks | FINALLY - Memory Prices Set To Plummet

▶RedGamingTech·2026.10.19