Advanced Micro Devices Inc.: A Promising Stock for Your Portfolio
Advanced Micro Devices Inc. (AMD) is a prominent semiconductor company known for its innovative products in the technology sector. Here’s a detailed overview of its operations, financial performance, and stock price performance.
Operations
AMD operates through several key segments:
- Data Center: This includes server microprocessors and accelerators, such as the AMD EPYC and AMD Instinct brands.
- Client: This segment covers desktop and notebook processors, including the AMD Ryzen and AMD Athlon series.
- Gaming: AMD provides graphics processing units (GPUs) under the AMD Radeon brand, catering to both consumer and professional markets.
- Embedded: This includes semi-custom system-on-chip (SoC) products and embedded processors used in various applications.
Financial Performance
For the fiscal year ending June 2024, AMD reported:
- Revenue: $5.84 billion, an 8.88% year-over-year increase.
- Net Income: $265 million, a significant 881.48% increase from the previous year.
- Operating Expenses: $2.83 billion, up by 5.64%.
- Earnings Per Share (EPS): $0.69, an 18.97% increase.
Stock Price Performance
As of October 11, 2024, AMD’s stock price was $167.89, reflecting a 2.26% increase from the previous close. The stock has shown considerable volatility over the past year, with a 52-week high of $227.30 and a low of $93.12. The company’s market capitalization stands at approximately $271.73 billion.
AMD’s strong financial performance and strategic focus on high-growth areas like data centers and gaming have contributed to its robust stock performance.
Advanced Micro Devices Investment Insight
The company’s Investment Scoreboard rating is above average, giving us confidence in selecting its stock for our portfolio. The projected long-term investment return could average up to 25% annually, assuming favorable market conditions. For example, when base interest rates are low, as they currently seem to be trending downward.
Price forecast
| MIN/MAX | 2024 | 2025 | 2026 | 2027 | 2028 |
|---|---|---|---|---|---|
| MIN | 159.58 | 170.80 | 182.81 | 195.66 | 209.41 |
| MAX | 389.55 | 416.84 | 446.24 | 477.61 | 511.19 |
When to buy?
The weekly price chart shows a downtrend. Therefore, the best entry into the position is when the price breaks through the nearest resistance. In this case that is $174.05.
Dividend Policy
As of now, Advanced Micro Devices Inc does not pay a dividend1. The company has focused on reinvesting its earnings into growth and development rather than distributing dividends to shareholders. This strategy aligns with AMD’s emphasis on innovation and expanding its market presence in high-growth areas like data centers and gaming.
If AMD decides to initiate a dividend payout in the future, it will be reflected in their financial reports and investor communications.
Conclusion
Advanced Micro Devices Inc. (AMD) presents a compelling investment opportunity with its above-average Investment Scoreboard rating. This confidence is bolstered by the potential for long-term returns averaging up to 25% annually, particularly in favorable market conditions such as the current trend of declining base interest rates.