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Has Advanced Micro Devices, Inc. (AMD) Stock Overshot Itself?

It’s safe to say that next-gen chipmaker stocks have been in favor for the past several months. Both Nvidia Corporation (NASDAQ:NVDA) and Advanced Micro Devices, Inc. (NASDAQ:AMD) have staged spectacular runs since the start of 2016. In that time frame, both AMD stock and NVDA stock are up about 400%.

But this year has introduced some divergence between the performance of the two stocks. NVDA stock, which was stuck in sideways in early 2017, roared higher after the company’s monster Q1 report.

NVDA stock is now up about 50% year-to-date.

AMD stock, though, is up only about 21% year-to-date. Those are great gains, but the stock has been quite volatile. Early 2017 gains were wiped out in May when the company failed to impress with its Q1 report. The stock has since rebounded from that sell-off, but with Q2 earnings due on July 25, investors should be a little concerned that the Q1 sell-off could repeat itself.

All in all, despite its robust growth story, Advanced Micro Devices stock doesn’t attract me at these levels.

Here’s why.

Advanced Micro Devices’ Financial Prospects

There has been a lot of bullishness building around the AMD growth narrative. Following the formal reveal of the EPYC...