Shares of Advanced Micro Devices (NASDAQ:AMD) have had a wild ride recently. Despite the massive success in the industry, AMD stock is down 6% year to date but is up 11% over the past month. I believe AMD has the potential to soar to new highs with its latest developments and technology.
AMD stock is close to its 52-week high $99 and it can hit the triple digits soon. The stock once traded for $5 in 2016 is close to hitting $100 in 2021.
AMD sure has come a long way.
I believe the stock can go higher and this is a good entry point. I give a lot of credit to CEO Lisa Su for the tremendous growth of the business. She has transformed the business with expert skills and the right partnerships.
With that in mind let’s take a look at the investment case for AMD stock.
Core Strength Lies in Gaming
AMD has become a familiar name with it comes to gaming chips. Its GPU shipments have increased significantly and the growing demand for new PCs has led to a massive rise in GPUs. It gained the most by developing custom chips for Microsoft (NASDAQ:MSFT) and Sony (NYSE:SONY). The company will be able to expand on this segment once the Xilinx (NASDAQ:XLNX) acquisition closes.
The biggest advantage that AMD enjoys is the outsourcing of production of the chips. This has helped cut down on costs and ensured that there are no production delays. It has also led to a growth in revenue over the years. AMD is constantly innovating and has announced new solutions and products that meet the needs of individual users and organizations.
The company recently announced the availability of a cutting-edge spatial upscaling solution. Known as FidelityFX Super Resolution, the technology will boost the frame rates and deliver high-quality gaming experiences. The technology has already received support from more than 40 game developers.
Xilinx Acquisition
AMD is very close to finalizing the Xilinx acquisition. The deal was recently cleared by the European Commission and the UK’s competition and markets authority. The waiting period at the U.S. trade regulators has also ended.
The company is now waiting for Chinese approval and is in the final stage. This deal will take AMD to a new level. It will be able to diversify the portfolio and target new markets like 5G cellular networks.
Rival Nvidia (NASDAQ:NVDA) is waiting on approval to acquire the design house ARM Ltd. Although the deal is much broader in nature, it is taking a lot of time and may get delayed. If AMD closes its acquisition soon, it will be able to expand and gain a large market share with its product offerings.
The Bottom Line on AMD stock
AMD stock is a bargain at the current level. It could go higher in the coming months and the Xilinx deal will add to its growth prospects. The company is well poised in the industry and has set gold standards for the gaming industry.
With a diverse portfolio and products that are high in demand, AMD is here to conquer the industry.
The company has the ability to handle chip shortage and there is no reason for investors to be nervous about it.
As AMD continues to grow with new products and updates, AMD stock will soar. The stock is a buy before the company announces Q2 results on July 27. I expect the company will beat analyst projections and will hit a new high in revenue and sales figures.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
