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Here's How Much You'd Have If You Invested $1000 in Advanced Micro Devices a Decade Ago

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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in Advanced Micro Devices (AMD) ten years ago? It may not have been easy to hold on to AMD for all that time, but if you did, how much would your investment be worth today?

Advanced Micro Devices' Business In-Depth

With that in mind, let's take a look at Advanced Micro Devices' main business drivers.

Advanced Micro Devices has strengthened its position in the semiconductor market on the back of its evolution as an enterprise-focus company from a pure-bred consumer-PC chip provider. AMD has emerged as a strong challenger to NVIDIA’s dominance in the graphic processing unit or GPU market based on its Radeon technology.

Launch of 7 nanometer (nm)-based AMD Radeon RX 5700-series gaming graphics card family featuring RDNA architecture, high-speed GDDR6 (Graphics Double Data Rate type 6) memory and support for the PCIe 4.0 interface, has helped the company increase presence among gamers.

Further, AMD Radeon Instinct family of GPU products are gaining traction in data center applications, including deep learning training and traditional high-performance computing (HPC) workloads.

Additionally, AMD EPYC 7001 Series of high-performance processors is helping AMD gain share in the server market. Further, AMD EPYC Embedded 3000 Series of processors addresses new markets including, networking, storage and edge computing devices.

On Oct 27, AMD announced that it has entered into a definitive agreement to acquire Xilinx for $35 billion in an all-stock transaction. The buyout will significantly help in expanding AMD’s data center business.

In consumer-PC market, AMD has become a key challenger to Intel courtesy AMD Ryzen desktop processor family. The company’s desktop-based processor offerings include Ryzen and high-end Ryzen Threadripper processors, among others. AMD Athlon and AMD PRO series of processors cater to commercial and consumer desktop PC market.

AMD’s processors are primarily powered by the company’s proprietary “Zen” CPU and “Vega” GPU architectures. Santa Clara, CA-based, AMD generated revenues of $16.434 billion in 2021. The company reports operations under two segments — Computing and Graphics, and Enterprise, Embedded and Semi-Custom.

Computing and Graphics segment includes desktop and notebook processors and chipsets, discrete GPUs and professional graphics. This segment generated revenues of $9.332 billion in 2021.

Enterprise, Embedded and Semi-Custom segment includes server and embedded processors, dense servers, semi-custom SoC products, engineering services and royalties. This segment generated $7.102 billion in revenues in 2021.

Bottom Line

Anyone can invest, but building a successful investment portfolio requires research, patience, and a little bit of risk. So, if you had invested in Advanced Micro Devices ten years ago, you're likely feeling pretty good about your investment today.

A $1000 investment made in May 2012 would be worth $16,716.15, or a 1,571.62% gain, as of May 18, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.

Compare this to the S&P 500's rally of 213.36% and gold's return of 9.56% over the same time frame.

Going forward, analysts are expecting more upside for AMD.

AMD is benefiting from strong demand of its Ryzen and EPYC server processors, owing to the increasing proliferation of Artificial Intelligence (AI) and Machine Learning (ML) in industries like cloud, gaming and data center. The growing clout of 7 nanometer (nm) products in the data center vertical, driven by work-from-home and online learning trends, is a key catalyst. AMD provided strong 2022 guidance for revenues backed by robust growth across all businesses. Higher server and client processor revenues are likely to lead to a sequential increase. The Xilinx and Pensando acquisition will boost AMD's data center business. Alliances with Amazon, Microsoft, Baidu and JD.com augment business prospects. However, stiff competition from NVIDIA and Intel is a concern. Shares have underperformed the industry year to date.

Shares have gained 5.72% over the past four weeks and there have been 11 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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