The top tech giant Advanced Micro Devices (NASDAQ:AMD) stock has consistently grown over the past year. Despite the pandemic and the supply chain issues, the company has been able to expand market share, drive revenue and achieve tremendous growth.
AMD stock is as high as 11% after the company reported blow-out quarterly results. The stock had dipped to $102 last week and went as high as $125 today.
However, the stock is trading much lower than the all-time high of $164 but the company has solid potential to reach there.
In my previous coverage of the stock, I had mentioned that the stock will rebound if it beats analyst expectations in the results. I have always been bullish about AMD stock and I still think the stock is a good buy for 2022. With that in mind, let’s dig deeper into my investment thesis of AMD stock.
Stellar Quarterly Results
The company reported impressive fourth-quarter results. It reported adjusted revenue of $4.83 billion, higher than the estimates of $4.53 billion and the net income stood at $974 million. It earned 92 cents a share and the gross margin went from 45% to 48% from the same period last year.
AMD is growing the market share in the server and PC market against the rivals. However, the company still has the potential to grow the market share and give stiff competition to rival Intel (NASDAQ:INTC).
For the coming year, the company has a strong forecast as the demand for chips used in the data centers is expected to grow. In 2022, the company projected revenue of $21.5 billion, much higher than the estimate of $19.27 billion.
For the first quarter, it expects revenue of around $5 billion, plus or minus $100 million. As the supply chain issues start to resolve, AMD will be in a better position to meet the demands of the users. This will give the company a solid chance to expand in the market.
I believe the company is in the growth stage and has massive potential to report strong revenue and enjoy a high market share in the coming years.
Xilinx Will Add Power to the Company
The much-anticipated Xilinx (NASDAQ:XLNX) deal has finally gotten approval from the Chinese regulators and this will have a huge impact on the future of the company.
It will introduce a new market and wider user base as the company continues to grow. 2022 revenue numbers will see a contribution from the Xilinx merger and it will push the stock to new all-time highs and the competition with Intel will only heat up further.
AMD has already set gold standards in the GPU segment and it is focusing on the data center to expand its market share. The merger is a big deal for the company and we will see its strength in the coming years.
The Bottom Line
AMD has also made significant new launches including the updates to its GPU lineup that is used for gaming. It is taking a large share of Intel and its profitability is hitting lofty levels. The bullish outlook for 2022 shows that the company is confident in handling supply chain issues and reporting stellar numbers.
All in all, I believe AMD is a top tech stock to own and the company will continue to expand throughout 2022. It has the right products and the potential to meet the changing demands of the users. This is only the beginning for the company and with the successful Xilinx merger, there is a lot to look forward to.
Considering the long-term potential of the company, the stock looks undervalued and has a solid chance to soar higher in the coming quarters.
AMD stock could be the one to own this decade.
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.
