How the Shift Toward Remote Learning Could Boost Advanced Micro Devices

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There are plenty of reasons why investors have been bullish on Advanced Micro Devices (NASDAQ:AMD) over the past few years. But has that bull run in AMD stock finally come to an end?

How the Shift Toward Remote Learning Could Boost AMD Stock

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Although there are several reasons for hesitation when it comes to investing in Advanced Micro Devices’ stock, there’s one reason in particular that explains why investors should still have high hopes for its enduring success.

The Work From Home Trend Is Here To Stay

Advanced Micro Devices has already seen a higher demand from cloud providers to accommodate working from home, but I think this is just the beginning. The work-from-home trend is likely here to stay, with well-known companies leading the way. For example, Twitter (NYSE:TWTR) CEO Jack Dorsey recently announced that employees will have the option to work remotely — forever. It’s still up in the air whether companies will be held liable if they force their employees to return and they become sick. As such, many other companies also seem to be choosing the path of least resistance. By some estimates, this represents between 40-56% of all jobs.

All of this could lead to a potential long-term catalyst for AMD stock that many were not previously considering before the novel coronavirus crisis. Here’s why this might be the case.

No Child Left Behind

The growth in demand from primary and secondary education for laptops (many of which will likely use AMD hardware) will be more significant than anticipated. There are over 38 million public school students, between (3-12) in the United States alone. Notwithstanding Covid-19, school districts are legally required to provide an education, so distance learning — via laptops — will need to be prepared for in earnest this Fall.

As of 2005, the National Center for Education Statistics report “Student Access to digital learning resources outside of the classroom” indicated that fewer than 6% of public school students had a laptop they could bring home. When asked for more recent numbers, I was told by the U.S. Department of Education, there are none, and they only anticipate another reading in to the situation in the “near future.” Meanwhile, 64,000 school districts have closed temporarily, and are thinking about what to do this fall.

Many districts are purchasing thousands of new laptops and other devices to help fill this need. Thankfully, the school districts aren’t alone in this effort.

Congressional Help on the Way

Legislation will help accelerate purchases of laptops for educational purposes. With the Federal Reserve recently reiterating that monetary spending can do but so much, it might be an opportune time to kill two birds with one stone.

The Council of the Great City Schools has such an idea. The organization, which represents dozens of school districts across the nation, wrote a letter to congress supporting, “an additional federal allocation of $175 billion in Educational Stabilization funds,” to make “a rapid transformation from school-based to home-based learning.” Furthermore, the HEROS act offers support in these initiatives, where it will enable “support [for] online learning by … [aiding the purchase of] educational technology and internet access for students, which may include assistive technology or adaptive equipment.”

Bottom Line on AMD Stock

All of this indicates that there is room at the table for most companies in the semiconductor space — including Advanced Micro Devices — to benefit. Between authorizations and procurement procedures, there was no way this potential catalyst could have been figured into the guidance provided by AMD CEO Dr. Lisa Su during the company’s Q1 earnings call.

As such, there is a potential catalyst for AMD stock that might not yet be baked into the current stock price. Only time will tell if the increase in laptop purchases to aid the education system leads to a boost for AMD in particular. But it’s certainly worth considering when eyeing AMD as a potential stock to buy.

As of this writing, Emmanuel Henson did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2020/06/how-the-shift-toward-remote-learning-could-boost-amd-stock/.

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