Tech stocks have suffered the most over the past few months and Advanced Micro Devices (NASDAQ:AMD) did not have a good start to the year. The company is a strong player in the industry and AMD stock is one you will never regret buying. It has big contracts in gaming and is entering the metaverse.
In my previous coverage of the stock, I had written about the buying opportunity when the stock was trading at $108. If you had made the move, you would have already made gains worth 5.5% today.
The chip manufacturer has a lot to look forward to and 2022 could be the year AMD stock hits an all-time high. It has gone from $116 to $120 in the past week and is up 11% over the past six months. Today, AMD sits around $114.
With AMD, it is important to look at the bigger picture because the stock can survive inflation, war, pandemic and supply chain issues. Every dip in the stock is a solid chance to buy because AMD is not going to stop anytime soon. Here are 2 reasons I love AMD stock.
New Products in the Portfolio
AMD has always impressed users with its tech and latest products. The company consistently invests in and works on introducing new products to its portfolio. It recently introduced an ultimate gaming processor, AMD Ryzen™ 7 5800X3D. It is an expansion of the Ryzen Desktop portfolio with six new processors that are available at a variety of price points. The Zen 2 and Zen 3 processors are designed for gaming and the company aims to bring flexibility with varied price options ranging from $99 to $299. The launch has helped the company expand on its Ryzen Desktop processors.
Besides the processors, AMD has also introduced new software this month. The Adrenalin Edition 2022 promises high performance and stunning gaming experiences. It has technology that helps performance improvements and is compatible with several games, thus, improving the users’ gaming experiences.
The company already has agreements with Microsoft (NASDAQ:MSFT) and Sony (NYSE:SONY) and the demand for their consoles is only going to grow in 2022. The demand has exceeded supply so far, which is proof that the demand for AMD’s chips is not going to slow anytime soon. Gaming is and will continue to remain a big growth catalyst for AMD throughout 2022.
AMD CEO Has Positive News
AMD’s Chief Executive Officer (CEO) Lisa Su stated in an interview with Yahoo! Finance Live that there is massive investment happening across the semiconductor industry and it will help alleviate the global semiconductor shortage. This means that companies will continue to generate powerful profit margins as they benefit from the pricing dynamics. Su believes that things will get better in the second half of the year.
This means we can expect semiconductor companies to continue to report solid numbers in the next quarters. Interestingly, AMD is one of the MANGO stocks that has the potential to outperform the market.
The Bottom Line on AMD Stock
Fundamentally, AMD holds a solid position in the industry and the numbers speak for themselves. It has an impressive balance sheet and a strong growth rate. The company is expanding its share in the market with new products and contracts. AMD stock is a buy-and-hold for the long-term.
I am not the only one bullish on the stock. Toshiya Hari, a Goldman Sachs analyst, has a buy rating on the stock. The analyst cited the growing serviceable available market of the company, the upside potential in its market share, and AMD’s ability to expand the gross and operating margins.
Out of the 21 analysts on TipRanks, 14 have a Buy rating and 7 have a Hold rating for the stock with a target price of $150.41.
I think the stock is selling at a discount and is a strong buy.
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.
