Advanced Micro Devices, Inc. (AMD)vs Netflix, Inc. (NFLX)

Quick verdict

AMD trades at $495.76 with a trailing P/E of 160.96 but a forward P/E of just 10.72, implying the market expects a sharp earnings acceleration, consistent with its 3-year EPS CAGR of 164.36%. NFLX trades at $68.95 with a trailing P/E of 21.82 and forward P/E of 32.49, alongside stronger current profitability, including a 28.52% net margin and 47.92% ROE versus AMD's 13.37% net margin and 8.08% ROE. AMD carries a higher beta of 2.469 versus NFLX's 1.5174, and both stocks have experienced steep prior drawdowns of -56.26% (AMD) and -57.42% (NFLX). The verdicts award AMD an overall score of 2 and NFLX a 4, with NFLX rated best for value and quality, and AMD best for growth and income, reflecting differing risk-reward profiles rather than a straightforward better-or-worse comparison.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

AMD, founded in 1969 and based in Santa Clara, California, designs semiconductors and operates globally within the Technology sector's Semiconductors industry. Its business centres on processors and chips serving computing, gaming, and data-centre markets. NFLX operates in the Communication Services sector as a worldwide entertainment provider, generating revenue primarily through subscription-based streaming content. AMD's market capitalisation of $808.39 billion significantly exceeds NFLX's $290.33 billion. The two companies serve fundamentally different end markets: AMD is exposed to hardware cycles and semiconductor demand, evidenced by a 3-year revenue CAGR of 34.34%, while NFLX's model depends on subscriber growth and content monetisation, reflected in a steadier 3-year revenue CAGR of 15.85% and 5-year revenue CAGR of 16.79%, versus AMD's 11.96%.

Valuation

AMD's trailing P/E of 160.96 is materially higher than NFLX's 21.82, though AMD's forward P/E of 10.72 is far lower than NFLX's forward P/E of 32.49, suggesting the market anticipates substantial earnings growth for AMD relative to current levels. AMD's PEG ratio of 1.31 is higher than NFLX's 0.64, indicating NFLX's valuation appears more reasonably aligned with its growth rate on this measure. AMD's price-to-sales ratio of 21.58 is well above NFLX's 6.19, while AMD's EV/EBITDA of 99.76 dwarfs NFLX's 9.66. Price-to-book also favours NFLX at 9.35 versus AMD's 12.54. AMD's free cash flow yield of 6.49% exceeds NFLX's 4.38%. The valuation verdict is B for both, but the underlying metrics show markedly different valuation structures between the two companies.

Growth profile

AMD demonstrates stronger growth metrics across the board, with a 3-year revenue CAGR of 34.34% compared to NFLX's 15.85%, though NFLX's 5-year revenue CAGR of 16.79% slightly edges out AMD's 11.96% over the longer horizon. The most striking divergence is in earnings growth: AMD's 3-year EPS CAGR stands at 164.36% versus NFLX's 27.09%, while over 5 years AMD's EPS CAGR of 20.8% trails NFLX's 14.39% comparison figure less clearly given differing base effects. The growth verdict assigns AMD an A rating, reflecting its higher recent growth rates in both revenue and earnings. AMD's forward P/E of 10.72 relative to its trailing P/E of 160.96 further signals expected near-term earnings expansion embedded in current growth trajectories.

Profitability and quality

NFLX shows superior profitability across nearly every measure, with a gross margin of 49.03% close to AMD's 50.28%, but an operating margin of 29.72% far exceeding AMD's 11.65%, and a net margin of 28.52% more than double AMD's 13.37%. Return on equity further highlights the gap, with NFLX at 47.92% versus AMD's 8.08%, and return on invested capital at 24.36% for NFLX against 6.22% for AMD. Despite this, the quality verdict rates both companies B overall, and NFLX is separately flagged as best for quality among the two. These figures indicate NFLX currently converts revenue into profit and shareholder returns more efficiently than AMD on a per-dollar-of-capital basis.

Balance-sheet risk

AMD holds cash of $23.36 billion against total debt of $104.18 billion, producing a net debt/EBITDA ratio of 1.19 and a current ratio of 2.72, with interest coverage of 4.97. NFLX holds substantially more cash at $79.91 billion versus total debt of $115.69 billion, resulting in a negative net debt/EBITDA of -0.82, indicating net cash position, though its current ratio of 1.14 is lower than AMD's, and interest coverage of 21.13 is considerably stronger. Both companies receive a B balance sheet verdict. NFLX's negative net leverage and higher interest coverage suggest greater debt-servicing capacity, while AMD's higher current ratio points to stronger short-term liquidity positioning.

Price performance and shareholder returns

NFLX has outperformed AMD over most recent periods, returning 106.6% over 1 year compared to AMD's 8.25%, and 38.86% annualised over 3 years versus AMD's -2.01% annualised. Over 5 years, AMD's annualised return of 38.35% edges ahead of NFLX's 30.63%. Year-to-date, AMD has returned 47.65% against NFLX's 45%, showing closer alignment recently. Both stocks have experienced comparable maximum drawdowns over 5 years, at -56.26% for AMD and -57.42% for NFLX, alongside differing volatility profiles reflected in AMD's beta of 2.469 versus NFLX's 1.5174. The momentum verdict is B for both, indicating comparable recent price momentum despite differing longer-term returns.

Which stock fits which investor

Based on the supplied verdicts, AMD is identified as best suited to investors prioritising growth and income, supported by its A ratings in both growth and income categories, its 3-year EPS CAGR of 164.36%, and a dividend yield of 3.48% alongside a buyback yield of 3.87%. NFLX is identified as best suited to investors prioritising value and quality, supported by its B ratings in valuation and quality, its lower PEG ratio of 0.64, and stronger profitability metrics including a 47.92% ROE. AMD carries a higher beta of 2.469, suggesting greater sensitivity to market movements, while NFLX's beta of 1.5174 is comparatively lower. The overall scores of 2 for AMD and 4 for NFLX reflect these differing strengths across the assessed categories.

• Value: NFLX
• Growth: AMD
• Income: AMD
• Quality: NFLX

Frequently asked questions

Which stock has better current profitability, AMD or NFLX?

NFLX shows stronger current profitability, with a net margin of 28.52% and ROE of 47.92%, compared to AMD's net margin of 13.37% and ROE of 8.08%. Both companies received a B quality verdict overall.

How do AMD and NFLX valuations compare?

AMD's trailing P/E of 160.96 is much higher than NFLX's 21.82, but AMD's forward P/E of 10.72 is lower than NFLX's 32.49. AMD's PEG ratio of 1.31 exceeds NFLX's 0.64, and both received a B valuation verdict.

Which stock has grown faster, AMD or NFLX?

AMD shows faster recent growth, with a 3-year revenue CAGR of 34.34% versus NFLX's 15.85%, and a 3-year EPS CAGR of 164.36% versus NFLX's 27.09%. AMD received an A growth verdict.

Is AMD or NFLX considered better for income-focused investors?

AMD is identified as best for income in the supplied verdicts, offering a dividend yield of 3.48% and buyback yield of 3.87%, compared to NFLX's dividend yield of 1.77% and buyback yield of 0.09%.

Related comparisons

• AAPL vs AMD
• AAPL vs NFLX
• AMD vs AMZN
• AMD vs AVGO
• AMD vs CRM
• AMD vs GOOGL