Advanced Micro Devices (NASDAQ:AMD) is a top-tier competitor among artificial intelligence processor manufacturers. Holding AMD stock was a great strategy in 2023, there’s no doubt about that. Looking ahead, investors should be realistic but also optimistic about the coming year.
AMD faces fierce competition in 2024, and some traders might worry that the stock will run out of gas soon. We’re assigning AMD shares an “A” grade. AMD’s potent presence and innovative drive within the AI chip industry should stand the company and its investors in good stead.
Get Ready for AMD’s AI-Ready Chips to Make Waves
It’s interesting to witness the mini-rotations among the top players in any sector. In microprocessors, AMD was the darling of the market in early 2023. A few months later, people treated AMD like it was yesterday’s news.
Fast-forward to late 2023, and AMD is back in the spotlight again. Investors and tech-geeks are both excited about AMD’s Ryzen 8040 Series processors for laptops. According to a Barron’s report, these processors are “designed to boost the performance of artificial intelligence applications by up to 60% versus prior models.”
A variety of laptop brands will feature Ryzen 8040 in the coming year. Yet, AMD crown jewel probably won’t be the Ryzen 8040 Series. Instead, it will likely be Instinct MI300 Series accelerators, which are ideal for AI data-center applications.
As AMD President Victor Peng explained, the Instinct MI300 Series accelerators are designed with AMD’s “most advanced technologies, delivering leadership performance, and will be in large scale cloud and enterprise deployments.” Clearly, AMD isn’t backing down as the AI chip wars escalate into the new year.
Should Value Investors Worry About AMD Stock?
Momentum-focused investors shouldn’t have any problem with AMD stock’s impressive price movement in 2023. All they had to do was hold some AMD shares, sit back and enjoy the returns.
What about value investors, though? They might fret over AMD’s price-to-earnings ratio, but that wasn’t a constructive activity in 2023. Despite value-focused traders’ concerns, the AMD share price continued to march higher and frustrate the skeptics.
Meanwhile, AMD continues to innovate with best-in-class products. An example would be the AMD RX 7700 XT graphics card, which is powerful but also affordable at around $400.
Another example is AMD’s new Ryzen 7840U handheld gaming device. The list goes on and on, but again, the Instinct MI300 Series accelerators are likely to be AMD’s shining star in 2024. In the final analysis, that’s where AMD’s value comes from. It’s not about P/E ratios. Rather, it’s about the company’s leadership position and game-changing products.
AMD Stock: Be on the Right Side of the Trade in the New Year
Without a doubt, there will still be a strong demand AI-compatible hardware in the coming year. It’s a long-term trend that has legs, and AMD is among the top competitors in the AI chip field.
That’s why AMD can offer growth and value at the same time. Realistically, AMD stock might not perform in 2024 like it did in 2023, but it still deserves a confident “A” grade. Therefore, consider holding a handful of AMD shares so you can stay on the right side of the trade in the coming quarters.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
