Investors in AMD stock will be excited this week, as the company’s stock jumped by 8% by the close of trading on Wednesday the 25th of April. After years of stagnation and playing the role of the ‘other chipset manufacturer’ behind Intel (NASDAQ: INTC), AMD now has competitive products and growing support in the PC manufacturing and PC enthusiast market.
Sales have skyrocketed, leading to increased confidence in the US based microprocessor manufacturer.
Here’s what you need to know about AMD’s growth and their prospects for the future.
AMD Stock is Succeeding Due to Investment in New Products
AMD (NASDAQ: AMD) was once the leader of the microprocessor market, developing products that outperformed those from rival Intel. However, in the last decade, AMD had stagnated, producing chipsets that have been behind the technology curve. Aside from their graphics card division, AMD was seen as the budget option for those who couldn’t access Intel chips.
That changed with the Release of AMD Ryzen chips in 2017, and the company now offers a range of products that outperform Intel equivalents in a number of key benchmarks. Perhaps more importantly, AMD has been able to remain price competitive with Intel. The combination of strong computing performance and appealing pricing has allowed Ryzen to quickly gain traction as a brand.
The sudden turnaround from AMD has led to huge sales increases. AMD reported in April that their first quarter sales were worth $1.65 Billion, which is 40% higher than what the company had in the first quarter of 2017.
Growth is being driven by Ryzen, but the company also makes money from their graphics card division, with products popular in the PC enthusiast market, cryptocurrency mining, and professional graphics applications.
Analysts believe that AMD could grow even more in the second half of the year, as sales of their new line of AMD Epyc server processors are expected to grow.
It’s important to note that AMD chips are also used in the hugely successful Microsoft Xbox and Sony PlayStation home video game consoles, which continue to create revenue and market mindshare for AMD.
Should You Buy AMD in the Second Quarter of 2018?
Some analysts are still divided on whether AMD Stock is a ‘BUY’ at this time. Most believe that current investors should hold, while interested investors should wait longer to see if the company can maintain current sales momentum.
As it stands today, AMD stock value has a total decline of -28% over the past 12 months, so the full impact of their recent turnaround and increase in competitiveness is yet to be seen. However, the most important news is that stock shot up by over 8% after the company’s first quarter financial report. If you’re an investor that is not averse to some well calculated risk, then the current low buy price of AMD stock could make for a rewarding purchase to hold over the long term.
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