Tech companies are going out and about to capture a larger market share and the pandemic could not do any damage to the growth companies. Advanced Micro Devices (NASDAQ:AMD) is one such company that is challenging the giant rival Intel (NASDAQ:INTC) and making solid moves in the industry. Already in a strong spot, AMD stock is consistently moving in the upward direction. The stock is up more than 80% in the past year and has gone from $83 last November to $154 today. The global chip shortage has made us realise the importance of tech devices in our lives and AMD is raking in cash due to the growing demand. The company has already set the gold standard in gaming chips and is one of the top choices of gamers.
AMD’s growth is driven by innovation and products that deliver. AMD has a lot to look forward to and the stock will only be hitting new all-time highs in the coming months. With that in mind, let’s dig deeper into my analysis of AMD stock.
AMD recently reported the third quarter results and it proved its worth yet again. There is a 54% rise in sales and the operating income has more than doubled. Its revenue stood at $4.3 billion and the operating income at $948 million. The operating income increased 14% year over year. This is one reason that makes AMD stock attractive. It is expected that the operating margin will continue to rise in the coming quarters.
It also shows that the company’s products are high in demand and they meet the expectations of the consumers. Despite the chip shortage, AMD has managed to report record-high sales and income quarter after quarter.
For the fourth quarter, the company expects revenue of around $4.5 billion which is a rise of 39% year over year. Looking at the way AMD is growing and expanding its market share, the figure looks achievable.
AMD stock moved upwards after the company announced Meta, formerly Facebook (NASDAQ: FB) as its chip customer. The company will work with Meta to support the data centre expansions and will also provide additional details about this partnership at the Open Compute Global Summit.
This cements the position of the company in the industry and proves that it has the potential to meet the demands of giant customers like Facebook. This is a major victory for AMD and it will reflect on the revenue and net income in the coming years. The company has already partnered with Microsoft (NASDAQ: MSFT) and Sony for the PlayStation.
It recently launched the Instinct MI200 accelerators that are the world’s fastest for high-performance computing and AI workload. The industry may be facing a massive shortage but this does not hamper the demand for AMD chips. It shows the company’s worth and it could become difficult for competitors to meet the technological innovations that AMD is bringing forth. With AMD, the sky is the limit and investors can make the most of it by purchasing the dip.
The Bottom Line
I believe this is only the beginning for AMD stock. It is only moving upwards from here and it certainly has the potential to double in the coming years. The company is consistently grabbing market share from rival Intel and will continue to do so. All in all, AMD has solid products that meet the demands of consumers and it is constantly expanding its market share. The future looks bright with massive potential to grow.
No pandemic or chip shortage can stop the growth momentum of AMD. It is one stock for the long term.