Attractive-Rated AMD Chips Away At Competitor Growth
AMD is one of the most well-known technology companies in the world, and the pandemic has only bolstered its already-prestigious position. With a host of processors, business software, and personal and professional computing solutions in production, it’s no wonder why their products inhabit a large percentage of work and work-from-home offices, or why notebook and server processors lead the charge.
And, when you factor in their 45% year-over-year growth in the computing and graphics division – largely attributed to the new pandemic normal – it’s easy to see why this company has topped trending charts repeatedly.
AMD, unlike many other companies (and even its competitors) experienced a relatively small crash in March – more of a bump in the road than a bottoming-out. And then, their stock began to rise, blossoming throughout Q2 to beat all expectations. When Intel INTC announced their manufacturing concerns, primarily the delayed release date of their next-generation 7-nm microchips, AMD skyrocketed.
However, AMD is nowhere near untouchable, as their stock prices reflected when NVIDIA NVDA last week announced their new $700 chips. On the other hand, this may not be reason to pause, as AMD then released news that their next line would be forthcoming on October 28 of this year.
Qai’s deep-learning AI (artificial intelligence) can’t predict how AMD’s newest chips will perform against NVIDIA’s, or any other competitors for that matter. However, we do specialize in analyzing financial metrics and recommending how investors should move on the stock market. So, without further ado, let’s see what the numbers say.
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Advanced Micro Devices (AMD)
Advanced Micro Devices closed down 4.05% on Wednesday, ending the middle of the week at $78.69 on volume approaching 54.7 million shares. This price follows the significant – but temporary – downturn of the previous week, evidenced in the 10-day price average of $85.82.
Despite this setback, the stock is still up a whopping 60% for the year, outpacing every expectation from experts and even the company itself.
And yet, there’s little reason the company should have been surprised. Come the onset of worldwide shutdown, computers and technology are how many of us have kept sane and working. Not to mention, the company’s other financial point to a robust company with a history of continual – and extreme – growth.
AMD’s revenue, for instance, has grown by 13.6% over the last fiscal year and 45.6% in the last three, bringing the company from $5.3 to $6.7 billion dollars in a relatively short time span.
EPS has grown by a whopping 71.2% over the last twelve months, far and wide outpacing the astonishing -1,581% growth (or lack thereof) over the past three. AMD’s ROE has also increased significantly from 6.5% to 16.7% in the same time frame.
However, it’s the company’s operating income that has seen the most astonishing improvement: 40% growth in the last fiscal year and almost 600% in the last three, from $127 million in 2017 to $631 million in 2020.
Currently, the company is projecting expected growth of almost 14% over the next 12 months. AMD is trading on a forward 12-month P/E of 58.04.
So, What’s the Verdict?
Advanced Micro Devices is a strong company with an inordinately strong history, both throughout this pandemic and before. Our AI has rated the microchip giant as slightly above average in its financial metrics, with an A in Growth and a C in Technical, Momentum Volatility, and Quality Value.
However, you shouldn’t take this rating at face value – in a company this large, any wiggle room for growth and momentum is room to capitalize. Between a decent report card, recent performance, and the anticipation of a new microchip on the horizon, AMD is rated Attractive.
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