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AMD shares have recently seen a decline, dropping by 23.37% since October, primarily due to concerns about losing market share to Nvidia amid the latter’s Blackwell chip competition. However, AMD is cautiously optimistic with the recent breakthrough from its DeepSeek V3 model, which could significantly reduce AI training costs. This development positions AMD GPUs as a more cost-effective alternative to Nvidia’s offerings, enhancing AMD’s competitive edge in the AI GPU market.
The forward P/E ratio for AMD has drawn attention due to its undervaluation relative to industry peers. If adjusted to align with the sector median, AMD’s valuation could theoretically rise by approximately 130.49%, offering a compelling investment opportunity as the company navigates potential risks while maintaining strong financial performance and market positioning.
Analysts have expressed confidence in this outlook, recommending that AMD shares be considered for purchase given their competitive total cost of ownership and the advancements from DeepSeek V3. This perspective highlights AMD’s potential for future growth, with expert opinion supporting its strategic initiatives to stay ahead in the AI-driven landscape.
Source: https://seekingalpha.com/article/4750764-amd-stock-deepseek-is-a-big-deal