The article was written by Vladimir Zaslavsky, a Financial Analyst at I Know First.

AMD Stock Forecast for 2018

“Someone is sitting in the shade today because someone planted a tree a long time ago” ~ Warren Buffet

Summary 

• AMD strongly positioned for 2018 by product expansion and demand
• Intel-AMD collaboration
• I Know First stock forecast for AMD based on Artificial intelligence

Advanced Micro Devices, Inc. (NASDAQ:AMD) is an American multinational semiconductor company headquartered in Sunnyvale, California, United States. AMD develops computer processors and related technologies for business and consumer markets. Its main products include microprocessors, motherboard chipsets, embedded processors, video and multimedia, graphics processors for servers, workstations and personal computers, and embedded systems applications. Its main competitors include NVIDIA and Intel in the microprocessor and Graphic Processing Unit (GPU) markets.

AMD’s surge in late 2016 continued throughout early 2017 amongst a wave of excitement surrounding upcoming product launches. The shares subsequently experienced a slump amid a giant tech rally as rivals instigated counter attacks and some of its products failed to meet expectations.

The 400% rise in 2016 ended the fears of bankruptcy and revenue declines. No longer are there discussions on the survival of AMD, rather there are discussions on its positioning to thrive. The shares rallied throughout the early stages of 2017, given the enthusiasm for the pending launch of its Ryzen desktop CPU line – the first products based on the next-generation Zen CPU core architecture. Enthusiasm was likewise prevalent for the launch of AMD’s Vega desktop GPU line and Epyc server CPU line.

2018 Roadmap

The slate of new products that began rolling out in early 2017 strengthened AMD’s position in its competitive landscape. Its Ryzen chips compete with Intel in the PC CPU market, its Vega GPUs contend with NVIDIA, and its Epyc server CPUs are in the primary stages of a growing market share. On the 8th of January, 2018, AMD announced a range of product announcements. President and CEO of AMD, Dr. Lisa Su stated “We successfully accomplished the ambitious goals we set for ourselves in 2017, re-establishing AMD as a high-performance computing leader with the introduction and ramp of 10 different product families.” Further, she claimed AMD is aiming to “[build] on this momentum in 2018 as we make our strongest product portfolio of the last decade even stronger with new CPUs and GPUs that bring more features and more performance to a broad set of markets.” AMD’s basic product roadmap is illustrated below.

(Source: AMD Investor Relations)

Indeed, the best performing laptops in 2018 are likely to be from AMD – the first time in over a decade. AMD’s solutions are likely to be superior to Intel’s at every price point in the market. AMD presents a compelling and complete portfolio, and is strongly positioned to capture additional market share in 2018.

Increasing Demand

• Crypto-currency boom
  • The market cap for all crypto-currencies has boomed from 18 billion in the beginning of January 2017 to 600 billion on the 1^st of January 2018 – an increase factor of 33.33. Subsequently, the mining of crypto-currencies has increased, inevitably increasing demand for AMD GPU’s – given they are one of the best methods to mine. As mining difficulty rises, demand for higher grade GPU’s rises, increasing AMD’s sales. As a result, investors can expect AMD to have a successful year in 2018 with respect to GPU sales, stemming from crypto-currency mining.
• Gaming market
  • Contrary to the personal computer market, the gaming market is growing at a strong pace, highlighting the bright opportunity for hardware makers (Intel expects the gaming PC hardware market to grow at 26% annually). Given AMD is a major supplier of GPU’s used particularly for gaming-focused PC’s, AMD will be able to capitalize on this trend.

Intel-AMD Collaboration

Intel has announced the 8^th Generation CPU core with AMD Radeon integrated graphics, which will likely set a new benchmark for integrated graphics performance. This is the first time that AMD and Intel have collaborated. AMD has been losing share in the discrete notebook GPU market and the partnership with Intel may position AMD to regain the lost ground.

Summary

AMD demonstrated strong performance and execution in 2017. It delivered according to its plan, and generally met or exceeded expectations. As AMD continues to transform, take risks, challenge the market and work alongside its competitors to meet targets and set new boundaries, we can expect an increase in AMD’s earnings growth. It appears that AMD is strongly positioned to achieve great results in 2018 with their upcoming products which will enter new markets or improve utility.

I Know First Algorithmic Bullish Forecast for AMD

I Know First currently maintains a bullish stance on AMD with signal strength 283.81 and predictability 0.76 for the 1-year forecast.

I Know First Algorithm Heat-map 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.

Past I Know First Success with AMD

I Know First’s algorithm has made accurate predictions for AMD in the past, such . In the article, it explains that AMD stock currently touts buy signals from the algorithmic forecasts of I Know First. In the 1 year forecast from August 30th, 2016 to August 30th, 2017, AMD shares increased by 65% in line with the I Know First algorithm’s forecast. See chart below.

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