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Advanced Micro Devices Is a Buy as the Company Keeps Expanding Its Market Share

Advanced Micro Devices (NASDAQ:AMD) stock is up 33% over the year and 18% in 2021. Despite the competition and challenging circumstances, AMD is doing something right.

AMD (AMD) sign outside of office building with greenery
Source: JHVEPhoto / Shutterstock.com

Whenever we think of computer graphics, we understand the importance of the chips that get the entire system running.

If Intel (NASDAQ:INTC) comes first to mind that’s understandable, but one should not miss out on AMD’s successful growth story.

One of the top tech companies of 2021, AMD is on an expanding spree and could be taking a large bite of Intel. AMD stock is trading at $105, much lower than the all-time high of $122, but that could present an opportunity.

It has been in the news for several reasons and is awaiting the approval for Xilinx merger. I think the stock will hit a new all-time high post-merger and this dip is a good chance to add it to your portfolio.

Let’s dig deeper into my bullish thesis for AMD stock. 

AMD Is Expanding on All Fronts

The company transformed everything with the introduction of Ryzen CPU in 2017 and it has since served the market with new products and faster GPUs.

It is interesting to see how far AMD has come with time.By the end of the second quarter, AMD held 22.5% of the total x86 CPU market. This is its highest share in over a decade.

As the company continues to take the market share of Intel, it is only moving upward. The server market contributes to the large market share owned by AMD, and I believe that it has the products and the manufacturing capacity to increase its market share in the coming years.

The company recently reported that the U.S. Department of Energy has closed a deal of $500 million to buy a supercomputer made with AMD.

It will have Nvidia (NASDAQ:NVDA) chips. Previously, Intel was supposed to provide chips for the computer but due to technical delays, it was canceled.

AMD could significantly benefit from this move and it already has an upper hand over Intel here. 

The Future of AMD-Xilinx 

One reason AMD has remained in the spotlight is the Xilinx acquisition. It still remains under Chinese regulatory pressures but the company has managed to get antitrust approvals from the U.S. and Europe.

The $35 billion strategic acquisition could be a game-changer for AMD.

The merger is expected to be completed by the end of this year. With the acquisition, AMD will be able to expand the chips it offers the customers and it will take on Intel.

Xilinx continues to report impressive revenue numbers and is spending a lot of money on research and development. The merger could make AMD one of the biggest tech companies and could expand its market share significantly.

This will take AMD stock higher and will reward the investors. 

The Bottom Line on AMD Stock

I have said this time and again, AMD stock is a great buy and it is one stock to hold forever. Given the lengthening history of rising revenue and the strong market hold, the stock has the potential to deliver.

I think it is trading at a cheaper rate currently which makes it a buy. There is no stopping the growth of the company and no better time than now to own AMD stock.

One must not ignore the impact of the pandemic and chip shortage on the growth of the company. It has blunted its ability to expand and enter new markets. If all goes well, AMD will be everywhere in the next two years. 

There is stiff competition between AMD and Intel and once the merger is complete, AMD could become one of the top revenue-generating tech companies. It has the resources, potential, and market. 

AMD is one of the best growth stocks to own in your portfolio. 

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.

Vandita Jadeja is a CPA and a freelance financial copywriter who loves to read and write about stocks. She believes in buying and holding for long term gains. Her knowledge of words and numbers helps her write clear stock analysis.


Article printed from InvestorPlace Media, https://investorplace.com/2021/09/amd-stock-is-a-buy-as-the-company-keeps-expanding-its-market-share/.

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