Stock Analysis on Net

Advanced Micro Devices Inc. (NASDAQ:AMD)

Economic Value Added (EVA)

Microsoft Excel

Economic Profit

Advanced Micro Devices Inc., economic profit calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Net operating profit after taxes (NOPAT)1 621 (201) (138) 3,517 1,330
Cost of capital2 21.56% 21.57% 21.38% 21.69% 21.65%
Invested capital3 58,227 57,883 58,525 6,195 4,364
 
Economic profit4 (11,935) (12,689) (12,648) 2,173 385

Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2024 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 62121.56% × 58,227 = -11,935

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Advanced Micro Devices Inc. economic profit decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Net Operating Profit after Taxes (NOPAT)

Advanced Micro Devices Inc., NOPAT calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Net income 1,641 854 1,320 3,162 2,490
Deferred income tax expense (benefit)1 (1,163) (1,019) (1,505) 308 (1,223)
Increase (decrease) in liability for product warranty2 103 20 14 14 22
Increase (decrease) in liabilities related to the 2024 Restructuring Plan3 89
Increase (decrease) in equity equivalents4 (971) (999) (1,491) 322 (1,201)
Interest expense 92 106 88 34 47
Interest expense, operating lease liability5 28 29 19 16 13
Adjusted interest expense 120 135 107 50 60
Tax benefit of interest expense6 (25) (28) (22) (10) (13)
Adjusted interest expense, after taxes7 95 107 84 39 47
Interest income (182) (206) (65) (8) (8)
Investment income, before taxes (182) (206) (65) (8) (8)
Tax expense (benefit) of investment income8 38 43 14 2 2
Investment income, after taxes9 (144) (163) (51) (6) (6)
Net operating profit after taxes (NOPAT) 621 (201) (138) 3,517 1,330

Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in liability for product warranty.

3 Addition of increase (decrease) in liabilities related to the 2024 Restructuring Plan.

4 Addition of increase (decrease) in equity equivalents to net income.

5 2024 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 600 × 4.63% = 28

6 2024 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 120 × 21.00% = 25

7 Addition of after taxes interest expense to net income.

8 2024 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= 182 × 21.00% = 38

9 Elimination of after taxes investment income.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Advanced Micro Devices Inc. NOPAT decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Cash Operating Taxes

Advanced Micro Devices Inc., cash operating taxes calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Income tax provision (benefit) 381 (346) (122) 513 (1,210)
Less: Deferred income tax expense (benefit) (1,163) (1,019) (1,505) 308 (1,223)
Add: Tax savings from interest expense 25 28 22 10 13
Less: Tax imposed on investment income 38 43 14 2 2
Cash operating taxes 1,531 658 1,392 214 24

Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Advanced Micro Devices Inc. cash operating taxes decreased from 2022 to 2023 but then increased from 2023 to 2024 exceeding 2022 level.

Invested Capital

Advanced Micro Devices Inc., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel
Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Current portion of long-term debt, net 751 312
Long-term debt, net of current portion 1,721 1,717 2,467 1 330
Operating lease liability1 600 641 489 419 242
Total reported debt & leases 2,321 3,109 2,956 732 572
Stockholders’ equity 57,568 55,892 54,750 7,497 5,837
Net deferred tax (assets) liabilities2 (339) 836 1,876 (919) (1,234)
Liability for product warranty3 188 85 65 51 37
Liabilities related to the 2024 Restructuring Plan4 89
Equity equivalents5 (62) 921 1,941 (868) (1,197)
Accumulated other comprehensive (income) loss, net of tax6 69 10 41 3 (17)
Adjusted stockholders’ equity 57,575 56,823 56,732 6,632 4,623
Construction in progress7 (324) (209) (143) (96) (136)
Short-term investments8 (1,345) (1,840) (1,020) (1,073) (695)
Invested capital 58,227 57,883 58,525 6,195 4,364

Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of liability for product warranty.

4 Addition of liabilities related to the 2024 Restructuring Plan.

5 Addition of equity equivalents to stockholders’ equity.

6 Removal of accumulated other comprehensive income.

7 Subtraction of construction in progress.

8 Subtraction of short-term investments.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Advanced Micro Devices Inc. invested capital decreased from 2022 to 2023 but then increased from 2023 to 2024 not reaching 2022 level.

Cost of Capital

Advanced Micro Devices Inc., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 181,510 181,510 ÷ 183,653 = 0.99 0.99 × 21.78% = 21.53%
Debt3 1,543 1,543 ÷ 183,653 = 0.01 0.01 × 3.39% × (1 – 21.00%) = 0.02%
Operating lease liability4 600 600 ÷ 183,653 = 0.00 0.00 × 4.63% × (1 – 21.00%) = 0.01%
Total: 183,653 1.00 21.56%

Based on: 10-K (reporting date: 2024-12-28).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 270,951 270,951 ÷ 273,963 = 0.99 0.99 × 21.78% = 21.54%
Debt3 2,371 2,371 ÷ 273,963 = 0.01 0.01 × 3.26% × (1 – 21.00%) = 0.02%
Operating lease liability4 641 641 ÷ 273,963 = 0.00 0.00 × 4.57% × (1 – 21.00%) = 0.01%
Total: 273,963 1.00 21.57%

Based on: 10-K (reporting date: 2023-12-30).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 126,929 126,929 ÷ 129,699 = 0.98 0.98 × 21.78% = 21.32%
Debt3 2,281 2,281 ÷ 129,699 = 0.02 0.02 × 3.26% × (1 – 21.00%) = 0.05%
Operating lease liability4 489 489 ÷ 129,699 = 0.00 0.00 × 3.83% × (1 – 21.00%) = 0.01%
Total: 129,699 1.00 21.38%

Based on: 10-K (reporting date: 2022-12-31).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 144,012 144,012 ÷ 144,772 = 0.99 0.99 × 21.78% = 21.67%
Debt3 341 341 ÷ 144,772 = 0.00 0.00 × 7.50% × (1 – 21.00%) = 0.01%
Operating lease liability4 419 419 ÷ 144,772 = 0.00 0.00 × 3.70% × (1 – 21.00%) = 0.01%
Total: 144,772 1.00 21.69%

Based on: 10-K (reporting date: 2021-12-25).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 103,734 103,734 ÷ 104,618 = 0.99 0.99 × 21.78% = 21.60%
Debt3 642 642 ÷ 104,618 = 0.01 0.01 × 7.54% × (1 – 21.00%) = 0.04%
Operating lease liability4 242 242 ÷ 104,618 = 0.00 0.00 × 5.29% × (1 – 21.00%) = 0.01%
Total: 104,618 1.00 21.65%

Based on: 10-K (reporting date: 2020-12-26).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Advanced Micro Devices Inc., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel
Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Selected Financial Data (US$ in millions)
Economic profit1 (11,935) (12,689) (12,648) 2,173 385
Invested capital2 58,227 57,883 58,525 6,195 4,364
Performance Ratio
Economic spread ratio3 -20.50% -21.92% -21.61% 35.08% 8.83%
Benchmarks
Economic Spread Ratio, Competitors4
Analog Devices Inc. -12.61% -8.53% -9.89% -13.14% -8.14%
Applied Materials Inc. 8.49% 16.39% 26.30% 21.81% 10.06%
Broadcom Inc. -7.66% 7.57% 6.13% -3.17% -8.59%
Intel Corp. -25.84% -14.86% -8.34% 8.71% 14.33%
KLA Corp. 19.27% 23.16% 25.46% 14.05% 2.99%
Lam Research Corp. 2.15% 7.46% 22.38% 17.74% 1.89%
Micron Technology Inc. -15.72% -27.76% -0.03% -4.60% -10.12%
Monolithic Power Systems Inc. 11.95% 12.67% 18.75% 21.27% 10.15%
NVIDIA Corp. 67.15% -11.01% 31.20% 11.64% -2.38%
Qualcomm Inc. 10.04% 2.48% 28.92% 26.32% 11.37%
Texas Instruments Inc. 5.44% 15.06% 35.71% 34.33% 29.48%

Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).

1 Economic profit. See details »

2 Invested capital. See details »

3 2024 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -11,935 ÷ 58,227 = -20.50%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Advanced Micro Devices Inc. economic spread ratio deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.

Economic Profit Margin

Advanced Micro Devices Inc., economic profit margin calculation, comparison to benchmarks

Microsoft Excel
Dec 28, 2024 Dec 30, 2023 Dec 31, 2022 Dec 25, 2021 Dec 26, 2020
Selected Financial Data (US$ in millions)
Economic profit1 (11,935) (12,689) (12,648) 2,173 385
Net revenue 25,785 22,680 23,601 16,434 9,763
Performance Ratio
Economic profit margin2 -46.29% -55.95% -53.59% 13.22% 3.95%
Benchmarks
Economic Profit Margin, Competitors3
Analog Devices Inc. -58.22% -30.61% -37.06% -84.45% -26.46%
Applied Materials Inc. 6.91% 10.99% 15.19% 13.92% 7.66%
Broadcom Inc. -20.93% 13.25% 11.47% -7.46% -23.70%
Intel Corp. -44.92% -25.23% -11.73% 9.75% 15.08%
KLA Corp. 16.54% 18.39% 21.53% 13.85% 3.35%
Lam Research Corp. 2.18% 6.55% 16.52% 14.31% 2.20%
Micron Technology Inc. -33.38% -95.52% -0.05% -7.69% -19.96%
Monolithic Power Systems Inc. 9.15% 10.27% 12.87% 12.03% 7.64%
NVIDIA Corp. 33.90% -8.71% 20.91% 9.10% -3.08%
Qualcomm Inc. 7.96% 2.18% 19.26% 15.85% 8.58%
Texas Instruments Inc. 9.09% 19.42% 31.32% 30.71% 26.43%

Based on: 10-K (reporting date: 2024-12-28), 10-K (reporting date: 2023-12-30), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-25), 10-K (reporting date: 2020-12-26).

1 Economic profit. See details »

2 2024 Calculation
Economic profit margin = 100 × Economic profit ÷ Net revenue
= 100 × -11,935 ÷ 25,785 = -46.29%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Advanced Micro Devices Inc. economic profit margin deteriorated from 2022 to 2023 but then improved from 2023 to 2024 exceeding 2022 level.