Advanced Micro Devices, Inc. (NASDAQ:AMD) stock has quite literally skyrocketed over the past year, as shares of AMD are up nearly 400%, while the Nasdaq is up only 22% over the same period.
With the release of its Ryzen 7 processor line earlier this month, and the Ryzen 5 products slated for April 11, more than a few analysts on the Street have issued upgrades and raised price targets for AMD stock.
According to MarketWatch, 11 of the 29 analysts providing recommendations call AMD stock a “buy” and 15 call it a hold.
Why the Recent Spike for AMD Stock?
For decades, the often-challenged (but undisputed) big dog in the CPU arena has been Intel Corporation (NASDAQ:INTC). Today, the Intel Core i7 is considered by many to be one of, if not the top performing consumer desktop processor. But, now that the AMD Ryzen is available, tech experts have conducted benchmark tests that show the Ryzen equal to, and in some cases better than, the Core i7.
Further, AMD is preparing to face off against Intel on the enterprise side as well, having announced a partnership with Microsoft Corporation (NASDAQ:MSFT) to develop a data center chip, dubbed Naples. According to an AMD executive, “Next quarter AMD will bring hardware innovation back into the datacenter and server markets.”
So AMD will simultaneously compete with INTC on two fronts, enterprise and consumer. According to Forbes, upward of 95% of the world’s servers are powered by Intel, but now is definitely the time that companies will be most open to consider switching from Intel to AMD. “For the first time in many years, AMD could pose a real threat to Intel’s server supremacy.”
This is exciting news for AMD stock investors, as it seems to alleviate some of the concerns about a potential correction in the relatively near future. At this point, AMD stock is still soaring and will continue to do so as the company chips away at Intel’s market share.
Bottom Line on AMD Stock
The technology industry is perhaps one of the most competitive of all, with new startups appearing almost daily. The potential for shifting market share is often more fluid than in other industries, as innovation is the true king here. And in the tech sector, innovation is the lifeblood of any successful company.
To that end, AMD’s ability to remain on top is only as secure as its latest silicon creation. While the company has done fairly well remaining innovative on its own, there is even greater potential going forward with Microsoft’s help and involvement.
AMD stock price hasn’t been this high in more than a decade, and considering the state of the technology industry, particularly CPU development, this is one stock that has solid potential for longer-term growth going forward.
As of this writing, Greg Gambone did not hold a position in any of the aforementioned securities.