Is it time to keep your horses on AMD stock?

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The stock of AMD Advanced Micro Devices has skyrocketed over the past month, so it's worth asking if it's more beneficial.

This is not just a wealth of positive news about the name, but also the growing stature of the company as a key supplier of semiconductor innovation; does not only depend on short-term phenomena such as cryptocurrency extraction, but can also take longer-term advantage in cloud games, server technology and, of course, even on the last manufacturing process. So, AMD has come a long way and there is good reason to be optimistic about the title.

The history of the bull

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The first sign of a company on the point to do better is the management keeps its promises. This is precisely what happened at Computex in Taipei, where AMD held its promise of new products to challenge the market leaders. "Data-reactid =" 14 "> The first sign of a company ready to do better is: the management keeps its promises. This is precisely what happened at Computex in Taipei, where AMD held its promise of new products to challenge the market leaders.

For example, general manager Lisa Su announced Rizen 3000 Series 7nm processors expected to become Intel INTC shares and NVIDIA NVDA Series RX 5000 GPUs, all of which need to be launched at various times throughout the year. second half. of the year across its entire product range.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The effect is composed of Intel's slowdown in innovation, which still remains a market leader. "data-reactid =" 16 "> The effect is aggravated by the Intel's slowdown in innovation, which still remains a market leader.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Third, the question of market share. According to estimates published by Mercury Research, AMD managed 13.3% of the X86 processor market in 1Q19, compared to 8.6% in 1Q18. His share in 4T18 was 12.3%. It is important to note that the overall market share increased by 4.7 percentage points compared to the same quarter of the previous year, including 4.9 points in workstations, 5.1 points in laptops and 1.9 points in servers. "Data-reactid =" 17 "> Third, the question of market share. According to estimates published by Mercury Research, AMD managed 13.3% of the X86 processor market in 1Q19, compared to 8.6% in 1Q18. His share in 4T18 was 12.3%. Of note, the overall market share was up 4.7 points from the same quarter last year, including 4.9 points in workstations, 5.1 points in laptops and 1, 9 point in servers.

However, it remains a relatively small player (17.1% of desktop computers, 13.1% of laptops and 2.9% of servers). The market share of its servers is expected to increase this year, thanks to new products and, as previously reported by the CEO of Intel.

According to JPR Research, AMD achieved a 2.3-point market share gain in the separate graphics processor market, mainly because it recorded the smallest drop in shipments: while the market declined 18.6%, Intel parts decreased by 22.5%, NVIDIA by 12.7% and DMLA by 4.6%. The market as a whole was turned upside down because Intel was not able to deliver as expected, which unbalanced the supply chain, given its size.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Maybe the main driver of the course of the 39; Action number of lucrative partnerships the company has managed to accumulate. The partnerships reflect AMD's growing prowess, legitimize its seat at the executive table and indicate that it is at the beginning of a multi-year growth phase. "Data-reactid =" 20 "> The main factor in the price of the stock was probably the number of lucrative partnerships the company has managed to accumulate. The partnerships reflect AMD's growing prowess, legitimize its seat at the executive table and indicate that it is at the beginning of a multi-year growth phase.

<p class = "canvas-atom-text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The first step is the announcement that Apples The all-new AAPL Mac Pro that will be launched this fall will be equipped with Intel processors, as well as AMD's latest generation Radeon Pro Vega II 7nm graphics processors. AMD technology should support 8K video, rendering, complex video effects, etc., in these devices. "Data-reactid =" 21 "> We start with the announcement that Apples The all-new AAPL Mac Pro that will be launched this fall will be equipped with Intel processors, as well as AMD's latest generation Radeon Pro Vega II 7nm graphics processors. AMD technology should support 8K video, rendering, complex video effects and more in these devices.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Which may have a relatively small impact on income but is significant is nevertheless Samsung Multi-year agreement for AMD mobile graphics chip license. License fees are important because they complement the product activity, which also depends on other factors, such as the health, capacity and capacity of AMD's founding partners. An analyst estimates that this could represent around 5% of the annual turnover. "Data-reactid =" 22 "> What can have a relatively small impact on the turnover but is nonetheless significant is: Samsung Multi-year agreement for AMD mobile graphics chip license. License fees are important because they complement the product activity, which also depends on other factors, such as the health, capacity and capacity of AMD's founding partners. An analyst estimates that this could represent around 5% of the annual turnover.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "It was also announced recently the agreement of the company with Alphabet GOOGL, which will use AMD custom graphics processors in its Stadia cloud game project. "Data-reactid =" 23 "> It was also announced recently the agreement of the company with Alphabet GOOGL, which will use AMD custom GPUs in its Stadia cloud game project.

Cloud gaming is in its infancy and the main benefit is that it allows people with limited computing resources to play all games in the cloud, play cross-platform, switch to TV, play instantly (without prior download, which can take a lot of time), protect copyright (since the game never appears on the device) and online game support (because it allows a easy navigation).

The more advanced readers are likely to stick to their devices for the moment, since there are of course latency issues and the rendering may not be comparable. In addition, what you save on your computing resources can be offset by the cost of bandwidth and data. These are the problems that will be solved over time.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Meanwhile, Microsoft MSFT is also working with AMD on its own cloud game project, which could be announced next week at E3. AMD's position in game console manufacturers is likely to play an important role in this regard. "Data-reactid =" 26 "> At the same time, Microsoft MSFT is also working with AMD on its own cloud game project, which could be announced next week at E3. AMD's position in game console manufacturers probably plays an important role here.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The company also collaborates with the US Department of Energy, Laboratory national Oak Ridge and Cray CRAY will deliver its super-computer called Frontier to the lab in 2021. "data-reactid =" 31 "> The company also collaborates with the US Department of Energy, the National Oak Ridge Laboratory and Cray CRAY will deliver its supercomputer named Frontier to the lab in 2021.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Key figures are generally positive. During the last quarter, the company announced a small surprise on turnover and profit. The estimate of EPS of 2019 is virtually unchanged over the last 12 months, but the estimate for 2020 is up 27.0%. "Data-reactid =" 32 ">Key figures are generally positive. During the last quarter, the company announced a small surprise on turnover and profit. The estimate of EPS of 2019 is virtually unchanged over the last 12 months, but the estimate for 2020 is up 27.0%.

But there are risks

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The good news seems to be in the stock. Its 12-month forward price / earnings ratio of 44.48X is higher than its median value of 39.89X in the last 12 months and 16.34X of the S 500, which is lower than its median value of 16.72X . "Data-reactid =" 34 "> The good news seems to be in the stock. Its 12-month forward price / earnings ratio of 44.48X is higher than its median value of 39.89X over the last 12 months and 16.34X of the S & P 500, which is lower than its median value of 16 , 72X.

The price / sales ratio does not seem encouraging either. The current value of 5.71X is ahead of its own median value of 3.83X and the current value of S & P 500 of 3.16X.

This could mean volatility in stock prices despite the many positive points.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The other factor that we probably can not neglect is the Cyclicity of the semiconductor business and the fact that AMD will not be able to reach its full potential as long as the rest of the market stays down. It is unlikely that the situation will recover in the short term. "Data-reactid =" 45 "> The other factor we probably can not ignore is the Cyclicity of the semiconductor business and the fact that AMD will not be able to reach its full potential as long as the rest of the market stays down. It is unlikely that the situation will recover in the short term.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "We must also keep in mind the processors AMD model without factory and capacity constraints of the Taiwan Semiconductor TSM foundry partner. Any error on the part of TSM would affect AMD's performance. "Data-reactid =" 46 "> We must also keep in mind the objectives of AMD. model without factory and capacity constraints of the Taiwan Semiconductor TSM foundry partner. Any error on the part of TSM would affect the performance of AMD.

Conclusion

AMD's innovation will undoubtedly lead to continued share growth (at least in the short term), which will go hand in hand with stronger margins and improved profitability.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "But given the soaring prices, it's a good thing. is probably a good idea to hold your horses now, especially since there are many more fish in the sea. Then head to You will find here the complete list of Zacks actions n ° 1 of the current rank (strong purchase). "data-reactid =" 49 "> But given the huge rise in prices, it's probably a good idea to keep your horses at the moment, especially as the sea is full of fish. You will find here the complete list of Zacks actions n ° 1 of the current rank (strong purchase).

More action news: it's bigger than the iPhone!

He could become the mother of all technological revolutions. Apple has sold just 1 billion iPhones in 10 years, but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $ 1.7 trillion market.

Zacks has just released a special report that highlights this booming phenomenon and six tickers to take advantage of it. If you do not buy now, you can get started in 2020.

Click here for the 6 trades >>

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "
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Do you want to know the latest Zacks Investment Research recommendations? Today, you can download 7 best actions for the next 30 days. Click to get this free report

Alphabet Inc. (GOOGL): Report of Analysis of Free Shares

Cray Inc (CRAY): Report of Analysis of Free Shares

Apple Inc. (AAPL): Free Stock Analysis Report

Microsoft Corporation (MSFT): Free Stock Analysis Report

Advanced Micro Devices, Inc. (AMD): Free Stock Analysis Report

Intel Corporation (INTC): free stock analysis report

NVIDIA Corporation (NVDA): Free Stock Analysis Report

Taiwan Semiconductor Manufacturing Company Ltd. (TSM): Free Stock Analysis Report

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