Advanced Micro Devices (NASDAQ:AMD) has become one of the greatest stocks to own. At the beginning of the hear, before Covid-19 upended the markets and sent unemployment soaring, AMD stock was trading under $50.
Nowadays, it’s up to $76.09, even after the incredibly unsettled first half, and could easily explode to $100 a share thanks to a significant number of catalysts.
Catalyst No. 1: Blowout Earnings
Advanced Micro Devices just posted a profit of $157 million in its last quarter, up from $35 million year over year. It also posted revenue of $1.93 billion, which is up 26% year over year.
For the year, the company expects revenue growth of 32%, which is up nicely from the 25% predicted in its prior quarter. “We expect strong second-half semi-custom growth as we read production to support the holiday launches of the new PlayStation 5, and Xbox Series X consoles,” said CEO Lisa Su, as quoted by CNBC.
Catalyst No. 2: AMD Is Chipping Away at Market Share
Heads are rolling at Intel (NASDAQ:INTC) after it announced the delay of its 7-nanometer chips.
“The company’s 7nm-based CPU product timing is shifting approximately six months relative to prior expectations. The primary driver is the yield of Intel’s 7nm process, which based on recent data, is now trending approximately twelve months behind the company’s internal target,” said Intel.
Meanwhile, Advanced Micro Devices already has 7-nanometer chips available. Better, AMD just said anticipated chips are still on schedule, including the 7nm processors that are based on Zen 3 architecture, and its RDNA 2 graphic cards.
That’s great news, especially with new gaming consoles from Microsoft (NASDAQ:MSFT) and Sony Corporation (NYSE:SNE) to be launched this December 2020 with AMD chips, as I’ve mentioned.
Catalyst No. 3: Analysts Still Love the AMD Stock
After earnings, Susquehanna analyst Christopher Rolland upgraded the AMD stock to “positive” from “neutral.”
“As share shifts appear to be accelerating for AMD, and the competitive gap widens, we can no longer wait patiently,” Rolland said. “Overall, with a bit of good luck we envision more than $3 of EPS in 2023 and a bull case for almost $5 in 2025.”
In addition, in recent weeks, Cowen analyst Matthew Ramsey lifted his price target on AMD to $65 on strong product execution, and server revenue growth.
Catalyst No. 4: The Coronavirus Could Drive Further Growth
With the coronavirus forcing many of us to work or “attend” school from home, Advanced Micro Devices could see a big surge in demand for data center chips. All as companies like Zoom Video (NASDAQ:ZM) will need additional space to handle bigger demand.
The company could also benefit from cloud-computing service demand, as companies invest in infrastructure to handle bigger demand with people working and going to school from home.
“A number of companies are expecting their cloud usage to exceed plans due to the impacts of the COVID-19 pandemic. According to Cloud Computing in Industrial IOT Market Research Report, cloud computing in the industrial IoT market is expected to grow from $3,966.66 million in 2019 to $7,078.35 million by the end of 2025 at a CAGR of 10.13%,” says Zacks’ Ritujay Ghosh.
The Bottom Line on AMD Stock
For quite some time, AMD has been one of the most exciting tech stocks to own.
I don’t see that changing any time soon. For one, it’s exploding with new innovation. Two, new gaming consoles from Microsoft and Sony required AMD chips. Better, cloud service and data center chip demand are only heating up. Plus, Advanced Micro Devices continues to chip away at Intel market share. With all of that, I wouldn’t be shocked to see AMD stock at $100 a share this year.
Ian Cooper, an InvestorPlace.com contributor, has been analyzing stocks and options for web-based advisories since 1999. As of this writing, Ian Cooper did not hold a position in any of the aforementioned securities.
