AMD PE ratio is that high due to their purchase of Xilinx. It's forward PE ratio is much much lower, in the 50s.

I'm curious, how does the all-stock acquisition that closed 2.5 years ago affect their trailing P/E but not their forward P/E ?

Different accounting methods from what I gather. The acquisition is being accounted for over a 5 year period for the trailing p/e but not being included in the forward p/e over this 5 year period. This really shows how p/e is not a great metric in a vacuum.

Thank you all guys for the explanation. I was very puzzled seeing AMD p/e as a complete dilettante in finance reporting.

When you see p/e mentioned in a debate run far away.

I wish people wouldn't post such pointless comments - the only users who get any value from reading your sentence are people who already share your view and can go "hah yeah!", while you couldn't be bothered to explain why it's your view to anyone who doesn't already think the same thing. Literally no benefit over not saying anything. Sorry to be blunt.

Perhaps better metric would be price/revenue.

Profits are very volatile. E.g. if AMD doubles the revenue profits might go 10x up, as R&D costs do not depend on the number of units sold