The New Dip In Advanced Micro Devices Is a Buying Opportunity 

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Tech giant Advanced Micro Devices (NASDAQ:AMD) is already making solid strides in the industry. The company is winning the console market and is at the top when it comes to semiconductor chips. However, AMD stock is not reflecting this.

Advanced Micro Devices (AMD) logo on blue background with Ryzen and Radeon brands
Source: Joseph GTK / Shutterstock.com

The stock is down 12% over the past month and has gone from the high of $132 to $108 today. There is no particular reason for the dip. AMD hasn’t made any announcements nor is there any analyst downgrade. The stock is falling for macroeconomic reasons but for long-term investors, this is a solid buying opportunity. AMD might face the heat due to the Russia-Ukraine war but it will not slow the company’s growth rate for the longer term. 

AMD stock may not be this low anytime in the future and this is the best time to load up on the stock. Considering the potential of the company, I am always bullish on the stock and I believe it is the one for the long term. If you did not have the chance to buy the stock, now is the perfect opportunity to do so.

Here’s why I think you should have AMD stock in your portfolio.

Stellar Financials

AMD has enjoyed a blowout quarter and despite the pandemic or the supply chain issues, there was no slowdown in the company’s growth momentum. This speaks for exceptional management and execution.

The company reported a revenue of $4.8 billion in the fourth quarter and total revenue of $16.4 billion in the year. AMD is consistently growing and the quarterly numbers are proof that it has solid fundamentals. It has projected a revenue of $21.5 billion for 2022, which is a massive rise from 2021. If you are concerned about the financials of the company, worry not. AMD has everything in control and it has reported some of the best numbers in the industry and I believe it will continue to do so throughout 2022. 

That said, AMD is known for their gold standard chips in the CPU and GPU markets. It is a major challenger to Intel (NASDAQ:INTC) and is consistently taking a bite of Intel’s share. Additionally, AMD has a positive outlook for the current quarter which shows the company’s confidence to tread through rough waters. 

AMD Stock Repurchase

All of us love a little bit of share buyback action and AMD is giving us just that. The company recently disclosed that it has authorized an $8 billion share repurchase program out of which it has already purchased $3 billion worth of shares in the last four quarters. AMD plans to fund the repurchase through cash generated from operations.

This program is a solid representation of the company’s cash generation abilities and commitment towards investor returns. AMD had a cash balance of $3.6 billion at the end of the fourth quarter and it generated $822 million in the quarter through cash from operations. 

The stock was up after the announcement of the repurchase program. 

The Bottom Line on AMD Stock

All in all, AMD is a top tech company to own and one that will not disappoint. Do not judge the company based on the short-term developments or dips. Every dip in AMD stock is a chance to add it to your portfolio. As the company continues to expand and take a larger share from Intel, it will continue to report strong numbers and this will generate value for shareholders. 

The demand for AMD’s products and chips is not going to slow down anytime in the future. With an asset-light business model, AMD has a stronghold in the industry and it will continue to impress customers and investors with solid products and numbers. 

Load up on AMD stock.

On the date of publication, Vandita Jadeja did not hold (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.


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