AMD's Costly Xilinx Deal and Reliance on Taiwan Fab Raise Questions About Future Risks
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AMD paid an enormous premium to acquire Xilinx, resulting in high goodwill that could require future write-downs.
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Tech giants like Amazon, Microsoft, and Apple are developing their own semiconductors, increasing future competition.
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AMD relies heavily on Taiwan Semiconductor, so geopolitical risks between China and Taiwan pose an existential threat.
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Stock-based compensation makes AMD's earnings look higher than its actual free cash flow.
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With competitors entering the market, AMD's high valuation of over 200x free cash flow seems risky and unsupported by fundamentals.