Advanced Micro Devices
But don’t let the company’s fluctuations (or seeming stagnation) fool you – AMD is doing incredibly well, both on paper and in action. Their stock is trending up well over double its lowest pandemic price point. And in fact, AMD’s stock is currently higher than it’s ever been, pandemic and all.
Currently, AMD is trading down 0.8% since the start of January 2021.
Q.ai’s deep learning AI (artificial intelligence) is here to help you navigate the market. We provide an in-depth, intelligence-based look at a company – and their financials – so you don’t have to do the digging yourself.
Sign up for the free Fintech Zoom AI Investor newsletter here to join an exclusive AI investing community and get premium investing ideas before markets open.
Advanced Micro Devices (AMD) Upcoming Earnings
AMD is slated to release their Q4 2020 earnings report on 26 January. The company is projecting revenues around $3 billion, plus or minus $100 million, with much of the gains coming from their CPU division. And if the company’s previous numbers have anything to say about what to expect from their performance, investors should be excited.
For instance, AMD’s revenue has seen consistent year-over-year gains for a while now, marking a 64% increase over the last three from $5.25 billion to over $6.7 billion. And looking forward, their 12-month revenue is expected to increase an additional 25% in the year to come. EPS, too, has seen explosive 146% growth in the last year, with investors eagerly awaiting Q4 results to top off 2020’s unprecedented good fortunes (for the microchip sector, anyway).
The last year has been unusual for Big Tech in a lot of ways, actually, and not just because of their growth. That said, AMD is no sideliner to these advances – the company is leading the pack with their highly sought-after processors powering everything from gaming consoles and laptops to data centers. The rapid expansion for such verticals has been directly driven by a sudden, global surge in work-, play-, and learn-from-home realities, which has seen more and more people spend the bulk of their time indoors (and in their pajamas).
Which brings us back to AMD’s upcoming Q4 report. The company is expected to post whopping product sales number across the majority of their microchips. Their EPYC and Semi-Custom chips, which power the likes of the PS5 and Xbox Series S and X, are projected to lead the pack. Not far behind will be their new Ryzen 5000 chips, which hit the market in October 2020 and quickly became one of the most in-demand CPUs on the market due to its superior processing power in work-from-home verticals. Additionally, AMD will likely post growth from a newly minted deal with AWS (Amazon Web Services) to increase their use of AMD processors in a number of products, including their game server hosting solution.
However, just because the company has sold a lot of chips doesn’t mean that the company is guaranteed to be as profitable as projected. Investors are also waiting to see how AMD’s increasing (though necessary) R&D expenses will eat into profit margins. After all, their operating income saw a whopping 803% increase from 2017 to 2020, bringing spending from $127 million to $631 million in a short timeframe.
But either way, the company’s fortunes are looking up ahead of their earnings report, if the stock market has anything to say about it. AMD is currently trading with a 12-month P/E of 52.88.
Advanced Micro Devices (AMD) Plows Ahead of Intel with Powerful Processors
When it comes to powerful processors, it’s impossible not to compare AMD with their biggest competition: Intel.
AMD has been beating Intel
The Ryzen 5000 processor is an excellent example. The company launched this mighty 7nm CPU at a premium price point in October 2020. This marked a reversal of AMD’s previous pricing strategies, which hinged on offering competitive chips at aggressive prices. Within a matter of weeks, the chip became popular across sectors due to its ability to enhance remote working and learning capabilities – despite the price hike. AMD learned a profitable lesson from this endeavor: producing a clearly superior product compared to its competitors comes with hefty cash benefits.
AMD’s position is in stark contrast to their biggest competitor: Intel. Intel’s own pricing power has been sliding since at least early 2020, though their misfortunes began long before that. Intel has experienced a variety of production setbacks and corporate missteps in recent years, often spearheaded by poor leadership from money-driven CEO Bob Swan. Whereas AMD’s new Ryzen 5000 CPU utilizes a 7-nanometer (nm) design, Intel has been stuck with a 14nm processor for years. And their answer to AMD’s challenge – a 10nm processor that’s been in the works for months – is not slated to hit the market until later in 2021.
AMD has taken advantage of the negative space left by Intel’s waffling leapfrog ahead of the competition, both in terms of production powers and market segment. However, AMD’s lead is still young, and competition is brewing on the horizon. In fact, Intel announced just last week that they have tapped Pat Gelsinger, CEO of VMWare Inc.
If AMD wants to keep their lead, their Q4 report better bring good news – or a plan to excel going forward.
What Does Our AI Have to Say?
Of course, knowing the details of AMD’s upcoming report will be good for investors and the stock market alike. But perhaps just as valuable is our AI’s take on the situation. We don’t just look at what’s happening here and now; our deep-learning algorithm analyzes a company’s financials, stock performance, and more to get a 360-degree view of their potential.
Our AI has rated AMD thusly: A in Growth, B in Technicals, and C’s in both Low Momentum Volatility and Quality Value. This puts them at above-average overall, especially in their Technicals and forward-looking growth potential.
Their overall report card, coupled with the potential hiding in their Q4 report and overall excellent sales performance, has led our AI to mark AMD as a Top Buy for the month of January.
Liked what you read? Sign up for our free Fintech Zoom AI Investor Newsletter here to get AI driven investing ideas weekly. For a limited time, subscribers can join an exclusive slack group to get these ideas before markets open.