AMD’s Ryzen Close Up. By Fritzchens Fritz from Berlin (via WikiMediaCommons/Public Domain)
Advanced Micro Devices Inc. (AMD) went from a company that was once in fair amount of trouble, to a competitor against giants Nvidia and Intel. Shares have been seeing a continuous rise, reaching a 12-year high. The stock rose 200% this past month alone. AMD’s Ryzen microprocessors can take a fair amount of credit for this success. That along with quality leadership with Lisa Su as CEO. Ryzen outperforms competitor Intel’s comparable chips, and at a lower price. The same outperformance can be seen for EPYC against the likes of Intel’s Xeon, and notably so. Since AMD’s launch of EPYC processors last year, they have gradually gained share within the server market space. They are also set to launch next-generation 7 nanometer products soon, well ahead of their competitors which aren’t scheduled to drop until 2020. This gives AMD a window to take a hold of even more market share in the coming year. Their avoidance of certain security issues that have hit competitors in recent moths may have been yet another factor in their recent uprise. Ryzen and EPYC, which brought this company back to life, are getting a ramp, which should be a good sign to shareholders. The company is optimistic about a 20% share in the desktop market, up to 40% in 2019, driven by Ryzen chips. It is also notable that AMD’s market is growing, and this means though it may have healthy competitors, their presentation of solid product may be gaining them a more solidified position in the market. They supply rapidly growing markets like smartphones, data-centers, AI, AR/VR, self-driving, automation, etc. The total addressable market (TAM) took a massive jump from $18.5 billion to $22.5 billion, which only helps a company like AMD grow, as long as they keep delivering great product.
AMD saw an impressive second quarter, with a revenue of $1.76 billion, a 53% rise year-over-year. It also reported its highest quarterly net income in seven years. Earnings per Share (EPS) increased by 700% from the previous-year quarter, and 50% from Q1 2018.
On September 18, Mizuho increases its AMD (NASDAQ:AMD) price target from $20 to $36
On the next day, Morgan Stanley reiterates an Underweight rating on AMD (NASDAQ:AMD) but increases the price target from $11 to $28
On September 20, Stifel increases its AMD (NASDAQ:AMD) price target from $21 to $38 citing strong demand for the company’s new products
Two day ago Jefferies reiterates its Buy rating and raises its AMD (NASDAQ:AMD) price target from $30 to $36.
This article was written by Esther Hanon, a Financial Analyst at I Know First.
[Source: Wikimedia Commons, May 15th, 2018]
“The first quarter was an outstanding start to 2018 with 40 percent year-over-year revenue growth. PC, gaming and datacenter adoption of our new, high-performance products continues to accelerate. We are excited about our long-term roadmaps and focused on delivering sustained revenue growth and profitability.”
--Dr. Lisa Su, President and CEO of AMD
GPU-Equipped Ryzen Pros Give AMD What It Needs to Conquer the Corporate Desktop
Integrated graphics mean that AMD's chips can now go head to head with Intel's
Summary:
AMD published their Q1 2018 results on April 25th, 2018 crushing analyst estimates on earnings, revenue and guidance.
Revenues increased 40% year-over-year. The improving margin scenario provides additional upside for the stock as AMD finally starts producing sizable profits.
The stock surged 11% in extended trading and had increased ever since the company published their Q1 2018 earnings.
The Q1 2018 earnings report of AMD also revealed that its Computing and Graphics segment has posted its 5th consecutive quarter of double digit Year-over-Year growth.
Thanks to stronger Ryzen processors sales, AMD posted an EPS of $0.11 (beats by $0.2), and revenue of $1.65 billion (+39.8% year over year) - beats by $80 million.
The reasons why AMD is beating estimates are the same. Cryptocurrency miners still bought many Radeon discrete GPUs. Ryzen APUs and processors are also finding more customers.
The forthcoming release of ASIC miners shouldn't be of concern. They do not threaten the lucrative tailwind of AMD from Ethereum miners.
The article was written by Vladimir Zaslavsky, a Financial Analyst at I Know First. Vladimir is completing a Bachelor of Commerce Scholars Program and Bachelor of Economics at Monash University – majoring in Finance, Economics and Accounting.
AMD Stock Forecast for 2018
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 has not posted a profit since 2011, and the stock price has fallen 43% in the past year as the company faces a tough road ahead.
Management has taken the first steps to turning the company around by narrowing its focus, no longer wasting resources on low-margin markets with high competition.
Growing market share in the markets it has targeted will be a challenge, but market conditions should improve during the second half of the year giving the company some time.
I Know First is bullish on Advanced Micro Devices in the long-term.
The rapid fall of AMD’s stock price over the past year more than makes sense considering its falling revenues and lack of profits. However, the company has now taken the correct steps to turn it around, and patient investors could realize solid returns from the devalued stock. I Know First is bullish on AMD for the long-term time horizon, believing the stock price will rebound in the second half of the year and continue climbing from there.
Advanced Micro Devices, Inc. (AMD) was a Aggressive Stock pick based on predictive algorithm recommended to I Know First subscribers on January 21th for the 14-days time horizon. AMD had a signal of 42.84 and a predictability of 0.3. In accordance with the algorithm, the company reported short-term capital gains of 27.23%.
AMD was part of the stock forecast that can be found in the “Risk-Conscious” Package.
The full Risk-Conscious Package includes a daily forecast for a total of 40 stocks with four main categories:
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