Advanced Micro Devices (NASDAQ: AMD) was victimized by the sector rotation out of tech stocks that occurred late in 2021. Since then, it has struggled to find a bottom, making continual lower lows as investor sentiment in the market has deteriorated further.

Wall Street is also divided on the outlook for AMD. According to the MarketBeat consensus price target, the stock has a potential upside of 52 percent. However, the semiconductor stock's earnings are also projected to shrink by 5.72% percent from $2.97 per share to $2.80 per share.

So let's examine some points of consideration for the troubled semiconductor stock.

Should AMD investors be worried about the crypto sell-off?

For better or for worse, many investors believe that AMD's and Nvidia's (NASDAQ: NVDA) stock prices are correlated with the movements of the crypto market. Thus, when the price of bitcoin tanks (which takes most of the crypto market with it as the major currency pair), these believers go into a panic.

However, there have been no peer-reviewed studies that show that such a positive correlation exists. An article published by data scientist Manan Shah in 2018 found the opposite conclusion. Shah wrote that there was no "statistically significant correlation between the prices of key cryptocurrencies and the stock prices of Nvidia and AMD."

However, one fact that the study missed was that most people who buy AMD's and Nvidia's GPUs are not mining the major proof of work coins such as bitcoin in the first place. For one, a mining GPU is not even the right piece of equipment to mine bitcoin, and you'd need to use a far more expensive ASIC miner instead to at least break even.

Bitcoin and other altcoins also go thru long periods of time where they are uncorrelated; this is especially true for less capitalized coins that GPU miners love to mine for their high-profit potential and low difficulty.

Overblown fears?

Another factor that makes discovering the correlation difficult is that we know sales are announced yearly. Each quarter, thus leading to a delay before the effect of reduced GPU sales is possibly felt due to a prolonged crypto market downtown.

The bigger issue, though, is the crypto market may be exaggerated in importance for AMD's business. It announced in May 2021 that AMD had generated only $155 million in revenue from its dedicated mining chips in the previous quarter, a big number. Yet, a fraction of AMD's billions in revenue is reported in the same breath.

So even if there is a correlation between the fall of the crypto market and AMD's stock price, it might be small enough that it's indiscernible. In other words, it is not a big enough problem for investors to spend their time worrying about, and it doesn't warrant much consideration when deciding whether to buy AMD's stock this year.

Valuation

What's more interesting and relevant to me is focusing on AMD's fundamentals and if they represent good value moving forward.

For one, its price-to-earnings (P/E) ratio sits at 37.9. At the end of 2021, the company had a P/E ratio of 55.1. This makes the stock significantly undervalued on this basis, as well as against's NVIDIA's P/E of 60.1.

Now for the matter of timing. Although timing the market and individual stocks might be impossible, the impending recession has been discussed so much over the last twelve months that we may finally see one. The head of the International Monetary Fund (IMF) said recently that a third of the world would be in a recession this year.

The rising sense of pessimism might be more crushing for AMD than a slowdown in revenue and earnings. This may, in turn, disconnect companies from their intrinsic values and leave good bargains for those who can see past the myopic doom and gloom.

Some indicators suggest we could start seeing many companies becoming cheaper in the near future.