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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and 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 $9.763 billion in 2020. 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 $6.432 billion in 2020.
Enterprise, Embedded and Semi-Custom segment includes server and embedded processors, dense servers, semi-custom SoC products, engineering services and royalties. This segment generated $3.331 billion in revenues in 2020.
Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For Advanced Micro Devices, if you bought shares a decade ago, you're likely feeling really good about your investment today.
A $1000 investment made in July 2011 would be worth $13,079.14, or a 1,207.91% gain, as of July 12, 2021, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 225.16% and the price of gold went up 10.76% over the same time frame.
Going forward, analysts are expecting more upside for AMD.
Advanced Micro Devices shares have underperformed the industry on a year-to-date basis. Increasing investments on product development amid stiff competition from NVIDIA and Intel are likely to dent margins at least in the near term. However, the company is benefiting from sales of its Ryzen and EPYC server processors, owing to increasing proliferation of AI and Machine Learning (ML) in industries like cloud gaming and supercomputing domain. Further, the Xilinx acquisition is anticipated to boost AMD's data center business. Moreover, 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. Notably, the company has raised revenue guidance for 2021. Moreover, alliances with Amazon, Microsoft, Baidu and JD.com augment business prospects.
Shares have gained 11.79% over the past four weeks and there have been 1 higher earnings estimate revisions for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
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