AMD Stock Forecast: Defying Critics


  2016-09-15_18-55-38  The article was written by Jacob Saphir, a Financial Analyst at I Know First.

AMD Stock Forecast

“Competition is not only the basis of protection to the consumer, but is the incentive to progress.” Herbert Hoover

AMD Stock Analysis


  • AMD continues its positive trend
  • Encouraging key statistic
  • Latest products could result in increasing market share
  • Upbeat anticipation for 4th quarter earnings

Encouraging Key Statistic:

AMD is defying its critics and proving to the high tech world that the processing and GPU market is not reserved only for Intel and NVIDIA.  As written in a previous I Know First article, under CEO Lisa Su’s leadership, she has reorganized the company. AMD was among the top stock performers for the year 2016.  A stock yielding over 370% in one year is a company worth looking into.  Because we are eager to learn what to expect in the future.

Some may have missed the opportunity to invest in AMD earlier in the year 2016.  Although the stock rose exponentially, a key ratio, Price to Sales (P/S) may tell otherwise.  Perhaps skeptics still believe the stock is not a bargain as it was before.  However, if we were to compare this key statistics towards other semi-conductor firms, AMD settles at P/S of 2.22.  While, the industry as a whole is higher with a P/S of 3.88.  As a result, AMD is trading with a P/S ratio 42% less than the industry.  Some may interpret this as a bargain.  In the past, the company’s P/S ratio was as high as 3.8 during the highs of 2000 and 3.2 during the highs of 2006.

AMD Stock Analysis

CES 2017 and Ryzen

Eager to begin the year with excitement, AMD debuted their much anticipated Graphics Processing Unit (GPU), Ryzen + Vega, at the Consumer Electronic Show (CES) 2017 in Las Vegas, Nevada.  With over 100,000 in attendance, AMD showcased its latest products and how Ryzen is applicable to its target market in virtual reality, e-sports, and PC gaming.  According to, the virtual reality PC demand is projected to grow tenfold by 2020 and the PC gaming to grow 35% by 2020.

As of January 8, 2017, although AMD’s market share of global processors is significantly less than Intel’s, its new processors will pose could pose a challenge.  If the capabilities for its newest processors are correct, this could mean Intel will face stiff competition in the high end processor market, it dominates.  Such a threat could force data center companies to leverage against Intel and fight for lower pricing.  Lower pricing could not only impact Intel’s future profit margin, but also increase AMD’s market share and revenue stream.  In addition, NVIDIA may also face stiff competition from AMD for its GPU’s.  Consequently, NVIDIA could see a decline in market share.  It is becoming evident, as written in a previous I Know First article.  AMD has signed crucial agreements to become GPU suppliers to Google and Alibaba.  Therefore, AMD has room to grow.

AMD Stock Analysis

Upcoming 4th Quarter Earnings:

AMD will report its 4th quarter earnings for the year 2016 on January 17, 2017.  Since releasing its first quarterly earnings on March 21st, 2016, AMD has surpassed analysts’ estimation.  In its latest quarterly earnings released on October 20, 2016, AMD reported a positive earnings per share of $0.03.  Marking it the first time AMD reported a positive earnings for the year.  Given its improved financial situation since CEO Lisa Su took assumed leadership and its positive debut of its latest products, investors will be anxious to see how these upbeat news will translate to earnings reported for next week.  Can AMD continue the trend, post a positive earnings per share, and surpass analysts’ expectation?

AMD Stock Analysis

Past I Know First Forecast Successes:

In such as the one dated on March 20, 2016, the algorithm accurately forecasted a bullish signal for AMD.  Since the forecast’s release, the stock increased by over 290% within its given 1 year forecast.

AMD Stock Analysis

In another example, the algorithm accurately forecasted a bullish signal for AMD on December 4, 2016.  The stock increased by 34 % in 1 month.

Below is the latest forecast I Know First algorithm released on January 10, 2017.  If we were to compare the forecast back in March 20, 2016, we can see both forecasts rate AMD as a buy.  If the previous forecast accurately predicted the stock would increase and it did by over 290%, the latest forecast below could indicate future increase in the stock’s value.

AMD Stock Analysis

I Know First Algorithm Heatmap Explanation

The sign of the signal tells in which direction the asset price is expected to go (positive = to go up = Long, negative = to drop = Short position), the signal strength is related to the magnitude of the expected return and is used for ranking purposes of the investment opportunities.

Predictability is the actual fitness function being optimized every day, and can be simplified explained as the correlation based quality measure of the signal. This is a unique indicator of the I Know First algorithm. This allows users to separate and focus on the most predictable assets according to the algorithm. Ranging between -1 and 1, one should focus on predictability levels significantly above 0 in order to fill confident about/trust the signal.