AMD Stock Forecast: New Technology Can Expand Market Share & Increase Bottom Line

This article was written by David Shabotinsky, a Financial Analyst at I Know First, and enrolled at the undergraduate Finance program at the Interdisciplinary Center, Herzliya.

AMD Stock Forecast


  • Overview on AMDs performance throughout the past few quarters
  • New Radeon Chips may help AMD further capture market share in the GPU market
  • Improvement in key financial risk measurements
  • How AI is being implemented by businesses to increase operational efficiency
  • I Know First’s AI-based algorithm maints a bullish forecast on AMD shares


Over the past year, Advanced Micron Technologies has been making huge strides in the market to expand and recapture market shares in various gaming technology markets. Its recent Q3 2016 reports, ending in September, had shown that revenue had increased over 23% from $1,061 million in Q3 2015 to $1,307 million during the previous quarter. CEO Lisa Su, who took over the struggling firm two years back, has put the firm on a track for a complete turn around. Essentially, the firm had begun to refocusing its operations on what made it great in the past, which was powerful GPU systems and other graphic solution devices. A huge potential tailwind for AMD is the Zen processor unit, set to be released in 2017, which will offer a newly advanced GPU type software.

How New AMD Radeon Chips Will Shape The Market

Recently, the firm has announced production of a new Radeon Chip applications will be incorporating AI technology and machine learning as well which will help AMD capture higher market share and take away from Nvidia’s area. They will be introducing three varieties based on GPU chips (gaming). Radeon instinct MI6 will be to offer a 5.7 teraflops performance. The second is the small form factor, or Fiji-based Radeon Instinct MI8. Third is the a GPU based on AMD’s soon to be released Vega architecture. AMD has explained how these new chips based on AI technology will be able to compete with their main competitors, who have longed controlled the chip processor market, Nvidia and Intel.

AMD STock Forecast

“Radeon Instinct is set to dramatically advance the pace of machine intelligence through an approach built on high-performance GPU accelerators, and free, open-source software in MIOpen and ROCm,” said Raja Koduri, head of AMD’s Radeon Technologies Group. “With the combination of our high-performance compute and graphics capabilities and the strength of our multi-generational roadmap, we are the only company with the GPU and x86 silicon expertise to address the broad needs of the data center and help advance the proliferation of machine intelligence.”

Though AMD is entering the market a bit late, as Nvidia has dominated the market thus far; if it is able to release higher-end products as it claims it can continue to capture a greater market share. Additionally, Vijay Rakesh an analyst at Mizuho Securities, the market for AI and machine learning based technology is expected to continue to grow tremendously at 12 times the current market. The firm has as well initiated a partnership  with Google to develop open-source software to be able t0 integrate existing ones with deep learning, which is expected to begin around January. AMD’s ROCm is already able to work with popular machine learning technology used by Google.

In general, businesses have been taking a huge interest in Artificial Intelligence and machine learning as they are realizing how the technology can not only help operations become more cost effect; but as well simultaneously, increase quality for the services and/or products being offered. In a world where firms are continuously outsourcing products for cheaper alternatives, chip-makers need to constantly find new innovative ways to maintain quality but compete in regards to pricing. Implementing AI-based technology will help AMD deliver supercomputing power at affordable prices to their customers. This will allow them to further grow in market size, thus bolstering their market value, or share price.

Review of AMD’s Financials 

With regards to their financials, year over year cash collection has actually increased therefore receiving cash from operations has risen which is great news. Though net income had fallen as they had began further heavily investing in technology to further establish a greater differentiation and therefore a real competitive advantage. Furthermore, its current assets are at 2,824 million which greatly outweighs its currently liabilities 1,473. Additionally, the firm’s total liabilities has been declining over the past few quarters. Both, show a declining level of risk for AMD, revealing a greater risk reward opportunity AMD investors.


It has been able to take away market share from the GPU maker Nvidia whose market share has been declining since 2015, while AMD’s has risen to over 38%, in the mobile GPU arena. The reason is because of the firm’s investment in new technological improvements mainly related to its Radeon 300 series products. The products were the first of its kind to feature high band-width memory.


Recap of Zen Product

AMD has not only begun competing directly with NVDA but has also begun hurting Intel as well. Its soon to be released Zen product is set to be able to operate 40% better than its predecessors in the market place. Though the firm has tripled in market value over the past year, in order for it fully convince investors of its turnaround it’s Zen product must be a success. If they are successful, it will convince PC buyers, along with investors, that AMD is in fact of capable of implementing powerful machines, which will help bolster its new Ryzen brand.

AMD’s Forecast By I Know First’s Self-Learning Algorithm


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, allowing the user 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.


Though AMD shares have more than tripled this past year, the CEO’s restructuring of the firm to get back to the ‘basics’, has helped maintain optimism in the future of the firm. The release of new products, i.e. the Zen product and various Radeon chip applications will continue to act as tailwinds for the firm. Additionally, AMD shares have been given a strong 1 year bullish signal of 506.24 by I Know First’s self-learning algorithm.

I Know First’s Deep Learning Based Algorithm

I Know First, Ltd. is a FinTech company that brings science and math to the financial world by providing daily investment forecasts based on an advanced self-learning algorithm. The algorithm utilizes neural network, based off deep learning to detect trends in the market, for underlying financial assets around the world. It does so by inputting empirical data on daily basis to generate heat maps. Like most trend detecting technologies, its able to detect price movements more accurately over a longer time frame, ie three-months or a year. The reason is because it involves a new type of self-learning AI based algorithms that are able to build trends that are often unknown even to the most intelligent analyst. The reason is because they are able to eliminate “noise” in the market. This refers to short-term (daily or intra-day) fears, worries, and negative fueled perception regarding the price of a security or general market atmosphere. By ignoring it once is able to identify trends in the market. The AI based algorithms, are able to adapt as a result of neural networks built to allow for deep learning, which then allows the algorithm to adapt accordingly. More on how specifically it goes about adjusting can be found here, in a past I Know First article.

I Know First’s Past Prediction on AMD

I Know First has been bullish on AMD shares in past forecasts. On August 31st, 2016an I Know First analyst wrote about how delaying AMD’s GPU to 2017, would benefit the firm in the long run, and AMD would benefit from newly released Apple products. In accordance with the algorithm’s prediction, AMD shares have risen almost 56% to date.


This forecast was sent to current I Know First subscribers on August 30th, 2016. To subscribe today click here.