It could be said that semiconductor manufacturing mainstay Advanced Micro Devices (NASDAQ:AMD) is part of 2020’s tech renaissance. Indeed, AMD stock recovered promptly from the intense market impact of the novel coronavirus.
Technically oriented traders might choose to wait for “confirmation” of the next leg up in AMD stock. In particular, they may feel that the price needs to break above the February high mark and stay there for a while. Or, perhaps they’re waiting for a major catalyst to propel the share price higher.
Overly cautious investors could end up leaving money on the table, though. Instead of waiting for a particular price breakthrough or a mind-blowing catalyst, informed investors only need to study the company. In doing so, they’ll find that AMD stock already offers a superior value proposition.
Making the Shift
Considering the toll that the coronavirus crisis has taken on the economy, Advanced Micro Devices’ resilience has been impressive. The ability to pivot to an altered business model helped tremendously in this regard.
For instance, shelter-in-place mandates have precipitated a shift towards PCs and laptops. This is because many students and workers need these devices in order to get their work done at home.
That’s perfectly fine with an adaptable company like Advanced Micro Devices. With the AMD Ryzen PRO 4000 series mobile processors, for example, the chipmaker specifically marketed their “work-anywhere flexibility.”
In all likelihood, AMD’s Client Business Unit Senior Vice President and General Manager Saeid Moshkelani, was speaking directly to homebound workers and students when he touted the Ryzen PRO 4000 processors as defining “the new standard for PC experiences – from high-end desktop computing to ultrathin and gaming notebooks, and now the modern business notebook.”
In another recent example, Graphics Business Unit Corporate Vice President and General Manager Scott Herkelman acknowledged that today’s professionals are operating under “increasingly tight budgets.”
Herkelman’s response, of course, was an AMD product. In particular, he recommended the AMD Radeon Pro VII workstation graphics card. Again, the focus is on a component designed for stay-at-home-compliant computing devices.
AMD Stock Looking Forward to Growth
We can’t effectively call AMD stock a “growth stock” unless the company maintains an ambitious vision for the future. Fortunately for the company’s shareholders, Advanced Micro Devices remains supremely confident in its ability to execute.
Based on the company’s first-quarter fiscal results, the confidence is justified. As reported by InvestorPlace contributor Chris Lau, AMD’s quarterly revenues came to $1.79 billion. That represents very strong 40.9% year-over-year revenue growth.
Moreover, compared to the comparable quarter of 2019, AMD demonstrated improvement in multiple areas during this year’s first quarter. Specifically:
- $177 million in operating income, indicating a year-over-year increase of $139 million
- Net income of $162, representing a massive year-over-year improvement of $146 million
- Earnings per share of 14 cents, signifying a year-over-year increase of 13 cents per share
Given those stats, AMD’s President and CEO had every right claim that the company “executed well in the first quarter.” Investors can hold their shares with confidence as the company should continue to generate outstanding revenues.
Looking toward the second quarter, the company predicts sales of roughly $1.85 billion. That would constitute a year-over-year increase of 21%. In addition, AMD projects 25% year-over-year revenue growth in the company’s full fiscal year.
These expectations are realistic as the company’s top-of-the-line components are ready-made for the “new normal” amid the realities of the stay-at-home economy.
The Final Word on AMD Stock
The strong growth in AMD stock is all the more impressive given the unusual and challenging times we’re living in today.
As a premier manufacturer of microprocessors, Advanced Micro Devices once again demonstrated its ability to adapt its product offerings. That, in itself, is an asset that investors cannot ignore.
Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.