AMD: My Top Stock Pick For 2022 And The Next Decade. How high could amd stock go

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Will AMD Stock Fly or Fall in 2022?

Harsh has been involved in technology since 2011, and sometimes also in retail. He is focused on finding great businesses in the long run. You can follow him on Twitter @ techjunk13

  • Factors beyond his control could weigh on Advanced Micro Devices inventory in 2022.
  • AMD provided impressive growth in 2021 thanks to strong demand for its chips.
  • Investors should not miss the forest for trees, however, as AMD’s catalysts could eventually help stocks deliver more growth.

Advanced Micro Devices (NASDAQ: AMD) turned out to be a lucrative investment in 2021. The chipmaker’s shares rose nearly 70% this year, fueled by the company’s consistently strong growth in revenues and profits.

However, as the stock chart below shows, AMD stocks have experienced some volatility recently due to concerns over inflation and the threat posed by the omicron variant of the coronavirus, which has led to a spike in the number of infections. Will these issues disrupt AMD’s impressive streak in 2022? Or will these high-tech stocks enjoy another year of extraordinary stock price increases?

AMD chart

Why AMD stock may fall

AMD expects to end 2021 with an estimated 65% increase in revenue over last year. The chipmaker could generate revenues of $ 16 billion this year, compared to $ 9.8 billion in 2020, while earnings are expected to more than double to 350.63 per share, compared to $ 400.29 per share action last year. However, consensus estimates suggest AMD may not be growing at such an amazing pace in 2022.

The company’s revenues are expected to grow at a relatively slower pace of 19% in 2022, according to Wall Street estimates, while earnings growth is expected to decline to 27%. With AMD stocks trading almost 45 times the profit and 12 times sales, Wall Street may not like the slowdown in growth – especially considering the S&P 500 index is nearly 29 times profit and 3.28 times sales.

At the same time, wider market weakness could prove to be another obstacle to AMD stock. Goldman Sachs analysts now expect the US economy to grow 3.8% in 2022, compared to an earlier 4.2% growth forecast. Analysts cite fears and threats that may arise from the spread of the omicron variant, explaining the decision to lower estimates of US economic growth for next year.

image Credit: Getty Images

The spread of the new variant may also exacerbate the supply chain problems that have plagued the semiconductor industry in recent months, leading to a potential loss of sales for AMD if it cannot produce enough chips to meet end-market demand. All of this indicates that AMD stock may begin shakily in 2022 due to factors beyond its control. However, any stock weakness could be taken as a buying opportunity as there are several reasons why AMD could increase in 2022 and beyond.

Anticipating AMD to overtake Intel as a leading processor vendor could make sense from an extremely long-term perspective, spanning several decades. While that’s a good argument to stay in AMD, it’s very likely that stocks will be cut severely along the way.

Why AMD Continues To Surge

AMD’s CPU market share recently peaked in 15 years as AMD’s market share continues to grow in the ultra-competitive x86 market. Now every AMD gain here is essentially an Intel (INTC) loss, and lately it was only AMD.

In recent years, we have seen a significant increase in AMD’s share of the processor market. The company’s market share has increased from around 20% in 2015-2018 to around 40% recently. While we saw a higher market share in the mid-2000s, I don’t believe AMD’s recent growth will be as temporary as it was 15 years ago. AMD is now much more established and much better capitalized. Moreover, the performance, performance and chip technology of the company have surpassed Intel in recent years. Therefore, it is no surprise that we have recently seen an increase in market share and an extreme advantage of stocks over Intel.

If we look at the desktop market where a lot of games are released, AMD briefly overtook Intel this year, surpassing the 50% market share line for the first time since 2006. AMD saw rapid growth in this segment with 20% of the company. -25% share about five years ago. Thanks to strong momentum and a solid line of AMD products, the chip manufacturer can continue to gain an increasing share of the desktop market in the coming years. Given the company’s trajectory, AMD has a good chance of becoming a leader in the desktop processor segment in my opinion.

The laptop market remains the key battlefield, where AMD’s market share has fallen to just around 8% in recent years. However, the company has made significant progress recently, capturing nearly 25% of this lucrative market. The departure from cheaper, inefficient devices has helped AMD in this segment. Moreover, the trend towards higher performance laptops should enable AMD to maintain a larger share of the laptop market in the coming years. Moreover, the strong dynamics of AMD should allow the company to continue innovating, which will allow it to increase its market share.

AMD vs Intel

Data according to YCharts

In recent years, we have seen AMD’s dramatic advantage over Intel, and the stock trajectory is closely correlated with AMD’s continued growth in the processor market. However, even if the company’s market share growth slows or continues to stagnate in the future, I don’t believe AMD’s stock will collapse. AMD already has an established position in the market. The company should continue its gains and even if the share price moves sideways or slightly lower in the near term, there should be gains in the medium to longer term.

Valuation May Seem High But The Growth Is Worth It

AMD’s consensus outlook for EPS is $ 3.13 for the next four quarters. This figure puts AMD’s P / E ratio at around 49. While the 49x EPS estimate may seem high, AMD has an increase to support this multiple.

EPS estimates

Most analysts predict AMD will deliver solid double-digit EPS growth for at least the next few years. The consensus estimate of the EPS is $ 3.99 in 2023, about a 50% increase from this year’s expected 3,500.64 result. Moreover, AMD has shown persistence in exceeding analysts’ expectations.

EPS Surprises

AMD exceeded consensus estimates in seven of the last eight quarters. The company beat forecasts by an average of 14% in the previous four quarters. Therefore, I expect to see more and better results in the future. Even if AMD only breaks the EPS consensus by an average of 10% in 2023, the company will deliver around $ 4.40. This EPS value suggests that AMD is currently trading around 35 times the EPS estimate for 2023. However, due to the high dynamics of the company, the dynamic growth should continue significantly after 2023.

Revenue Estimates

We can see that AMD should sustain double-digit revenue growth, and this trend of solid revenue growth is likely to continue well beyond 2023. While consensus is estimated at $ 22 billion in 2023, higher-end forecasts suggest the company may deliver north of $ 24 billion. These are explosive numbers, provided AMD recorded Q3 2020 revenues of 3,500.8 billion.

Financial information for the third quarter of 2021

In the company’s latest profit report, we see that AMD’s revenues increased by as much as 54% y / y. While the consensus of next year’s estimates for Q3 predicts an increase of 18% YoY, I suspect AMD may surprise at a higher level, ensuring revenue growth north of 20%. In addition to significantly increasing sales, AMD is becoming more and more profitable. In the last quarter, we saw an explosion in gross profit to over 3,500 billion, an increase of 70% y / y. In addition, the gross profit margin increased significantly from 44% in Q3 2020 to 48% in the previous quarter. Net income rose 137% from $ 390 million to $ 923 million over the same period. We can see AMD becoming more profitable with scale, and we will likely continue to see AMD’s profitability growing significantly as the company grows.

Here’s what AMD’s finances might look like in the years to come:

Year 2022 2023 2024 2025 2026 2027 2028 2029 2030
B $ revenues twenty 23.5 27.5 32 36.7 42 47 51.5 55.6
Increase in revenues 18% 17% 16% 15% 14% 12% 10% 8% 7%
EPS $ 3.65 4.50 5.48 6.58 7.76 9.4 11.2 13.5 16
Forward P / E 45 42 40 38 35 32 thirty 28 25
Share price pLN 203 230 $ 263 295 pLN 329 pLN 358 405 pLN 448 pLN 500

source: Author’s material

Anticipating AMD to overtake Intel as a leading processor vendor could make sense from an extremely long-term perspective, spanning several decades. While that’s a good argument to stay in AMD, it’s very likely that stocks will be cut severely along the way.

AMD Stock Price Alert: Buy the Dip Opportunity Is Here

AMD stocks burned in 2021 but cooled down in 2022. Let’s take a look at Monday’s decline, which appears to be a buying opportunity.

january 10, 2022 4:39 PM CET

Advanced Micro Devices (AMD) Stocks – Get Advanced Micro Devices, Inc report finally felt a pinch and sold out.

Including today, the stocks fell in four of the last five sessions, their only increase since Thursday, January 6, was just 0.06%.

With today’s decline, AMD stocks are working their third consecutive week of decline and the seventh consecutive week of decline in the past eight weeks. In Monday’s low, the stocks fell 24% from a 52-week high.

At one point, Nvidia (NVDA) – Get NVIDIA Corporation Report and AMD were two bullish stocks that couldn’t have done anything wrong.

Both stocks moved higher and recorded monstrous gains in spite of the turmoil in growth markets.

However, sales pressure eventually caught up with these names despite looking good at the end of the year.

However, for many investors, these kinds of sales simply present an opportunity. Do we see such a possibility in AMD stock now? I think so.

Trading AMD Stock

AMD stock chart for 4 hours.

AMD stock chart for 4 hours.

Chart courtesy of

Above are four AMD stock charts with weekly measures superimposed to help show both short-term and long-term trends.

TheStreet Recommends

You will notice that Monday’s decline is not related to any bullish RSI divergence. It’s a shame – it would be a nice catalyst to add to our setup.

This is okay as there are a few others.

They start with a 200-unit moving average on a four-hour meter that hasn’t been touched since June. Additionally, there is also a 21-week moving average, in addition to the weekly VWAP measure.

Finally, there are also two daily highs from the company’s October earnings report. AMD knocked the estimates down, but after such a strong rally, the stocks needed a break before a further increase.

Thus, we ended up with those highs near $ 127 to $ 128.

Between this level of interest, different moving averages across multiple timeframes and the weekly VWAP measure, we have enough catalysts to guarantee a long position here.

Especially if the bulls want to be very conservative and use today’s low as their stop. Currently, this means a risk of just over $ 3 per share and looking for a move much greater than the upside.

I’d like to see a return to the area of ​​$ 137 to $ 138, followed by major North moving averages from $ 140.

On the other hand, we now have a fairly clear hole that can be tackled from Monday.

Advanced Micro Devices (NASDAQ: AMD) turned out to be a lucrative investment in 2021. The chipmaker’s shares rose nearly 70% this year, fueled by the company’s consistently strong growth in revenues and profits.

Increasing Market Share

AMD continues to show its strength to compete for market share with key rivals such as Intel, which previously dominated the industry. As mentioned in the earlier sections, the company is gradually ahead of the HPC market, with chips located in four of the ten fastest supercomputers in the world, while Intel’s industry leader chips can only be found in two. The continual innovation of the wider product roadmap has made AMD better equipped for greater market share growth than ever before. AMD computing processors are now more advanced than many of their competitors in the industry. For example, the latest Ryzen processors for PCs only measure seven nanometers, while Intel’s key rival is still 10 nanometers.

This is further confirmed by the fact that AMD achieved an acceleration in the growth of the TAM share this year from 4% to 5%, compared to about 2% to 3% a year earlier. Looking ahead towards the end of the year, the company is expected to reach between 13% and 15% of TAM’s share, up from just under 10% the previous year. The company is expected to gain an increasing market share in the coming years given its proven strengths in computer and graphics processors for retail and commercial use. Based on the above analysis of AMD’s latest developments and growth trajectory, the company is expected to capitalize on the majority of its data center market share over the next five years, ensuring strong stock gains from both a fundamental and valuation perspective.

Overall Financial Prospects

Based on the analysis above, AMD is expected to generate net revenues of $ 16.1 billion by the end of 2021. This represents an increase of 65% compared to the previous year, based on the company’s excellent performance in all business units over the past nine months as well as strong market demand towards the end of the year. The top lane is expected to grow further in the CAGR of 13.9% towards net revenues of $ 30.9 billion through 2025.

Much of this growth will be driven by AMD’s enterprise, embedded, and semi-custom segment, which houses most of the accelerating data center sales. By the end of the year, corporate, embedded and semi-custom revenues are projected to be $ 6.7 billion, with a further 16.2% CAGR increase towards $ 14.3 billion by 2025. The growth assumption is performance driven segment in recent quarters, as well as market trends observed in corporate / hyperscale data centers, HPC and gaming markets.

Meanwhile, AMD’s PC and Graphics segment, which generates its revenues primarily from the sale of computing and graphics processors for computing devices such as desktops and laptop workstations, should benefit from continued demand in the PC market. In particular, PC and Graphics segment revenues are expected to reach $ 9.4 billion by the end of the year and will continue to grow by 2025, with a CAGR of 12.2% to $ 16.7 billion.

source: Author, with data from our internal financial forecast

Despite rising raw material costs due to constrained supply in the industry, AMD is expected to see a further improvement in gross margin by the end of the year thanks to better product prices as well as an increasing shift of the product line towards more marginalized server processor revenues. The company has gradually increased its quarterly gross profit margin from 45% to 48% over the past 12 months and is expected to achieve an annual gross profit margin of 48% by the end of the year. Looking to the future, increasing sales of high-margin data centers are expected to push the throughput rate to more than 50%, which is in line with management guidelines, AMD’s operational outlook, as well as margin growth patterns seen in other industries.

source: Author based on data from our internal financial forecast.

The operating expenses, mainly consisting of research and development (“R&D”) as well as market, general and administrative (“MG&A”) expenses, are expected to be approximately 26% of total revenue in 2021 based on the cost structure observed in the last 12 months. This number is expected to increase gradually, albeit at a slower pace than revenues, to support the further development of AMD’s competitive product roadmap, which will be fundamental to ensuring competitive growth in the years to come.

source: Author based on data from our internal financial forecast.

Additionally, the demand for AMD chips has grown recently as more and more tech giants choose AMD’s offerings. In addition, a further increase in demand is expected as more than 100 systems supported by 3rd generation EPYC processors will be manufactured by Dell (DELL), Lenovo (LNVGF), Cisco (CSCO) and others.

Realistic expectations

An investment in AMD of $ 50,000 is unlikely to make you a millionaire. Repeating the remarkable returns from the last half-decade would bring AMD’s stock price above $ 900 per episode and market capitalization in excess of $ 1 trillion.

This simply isn’t a realistic five-year target, and it’s unlikely that AMD will achieve this type of ROP in the foreseeable future. If AMD gets more millionaires at this point, they will have to start with AMD’s original investments well over $ 50,000.

image Credit: Getty Images.

Growth drivers

AMD is led by a highly competent team led by CEO Lisa Su, and the company rarely messes with its business plans today. AMD is stealing market share from NVIDIA (NASDAQ: NVDA) while taking advantage of a rare manufacturing process advantage to bribe Intel (NASDAQ: INTC) in selling desktop and server CPUs) .

AMD will also benefit from the launch of new video game consoles this fall. Both Sony (NYSE: SONY) PlayStation 5 and Microsoft (NASDAQ: MSFT) Xbox Series X will be based on custom versions of AMD’s GPU and core processors, as will the Xbox One and PlayStation 4 generation.

Moving beyond these short-term sources of potential backup fuel, I like the way AMD invests in its own future. R&D budget is growing faster than AMD’s revenue, as is capital expenditure. In other words, AMD is doing everything it can to foster innovation and new ideas. This is a fantastic way to run a high-tech company like AMD:

AMD's Research and Development Expenditure Chart (TTM

Additionally, the demand for AMD chips has grown recently as more and more tech giants choose AMD’s offerings. In addition, a further increase in demand is expected as more than 100 systems supported by 3rd generation EPYC processors will be manufactured by Dell (DELL), Lenovo (LNVGF), Cisco (CSCO) and others.

Часто задаваемые вопросы

Advanced Micro Devices является включена w индекс S & P500.

Как и в случае с другими акциями, цена акций amd сегодня определяется такими факторами как ежеквартальные объявления о прибылях и убытках, а также финансовые показатели общего фондового рынка ледует учитывать в обязательном порядке при принятии решения о обязательном акциями AMD.

In 2018, the company AMD sитались одними из лучших среди производителей чипов в индексе S & P500. Согласно результатам компании за второй квартал 2018 года, продажи выросли на 53% по сравнению с аналогичным периодом прошлого года, благодаря успеху графического, вычислительного и корпоративного оборудования AMD.

Ипы AMD Ryzen, используемые в высокопроизводительных игровых и корпоративных компьютерах, превосходятах. Графические чипы компании также хорошо продавались в последнее время, поскольку такие процессоры широко используются для приложений сферы искусственного интеллекта.

Компании в полупроводниковой промышленности всегда борются за все более маленькие, более девыстрие. Intel is gifted by the первым and крупнейшим нонкурентом AMD. Компания является мировым лидером в поставках интегрированных платформ цифровых технологий. Main contract from AMD – IBM. Полупроводники представляют собой только одну часть бизнеса компании, однако она продолжает вкладывать бизнеса компании асть бизнеса компании NVIDIA, another independent competitor AMD, specializing in ипах для игр and graphics. С 2006 года, когда AMD приобрела ATI, две компании создали дуополию на рынке графических процессоров.

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Wall Street’s Take

According to TipRanks analysts’ consensus, AMD stock is a moderate buy. Out of the 15 recommendations, there are 11 purchases, three holds, and one sale.

aMD’s average target price is $ 114.62. Target prices range from a low of $ 70 to a high of $ 150 per share.

Bottom Line on AMD stock

AMD seems to be in great shape right now. The finances are strong, the growth potential is excellent and the company is focused on increasing market share.

So it’s hard to argue that now isn’t the best time to jump into the AMD stock market.

Disclosure: At the time of publication, Chris MacDonald had no position in any of the securities listed in this article

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