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The IT industry has been seeing phenomenal growth over the past few decades. Stocks of different IT companies have seen exponential growth in their value. The same is the case for Advanced Micro Devices, which many experts expect to see a surge in its share value.
Walter Jeremiah founded Advanced Micro Devices in 1969 and launched an IPO in less than two years. They started as a second-source manufacturer and focused on giving the best quality. Let’s get an overview of what the company does.
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Overview of Advanced Micro Devices
Advanced Micro Devices is a global manufacturer of semiconductor devices that are a vital component of computer processing. AMD also sells various other components that have a critical role in consumer electronics manufacturing.
Initially, the company started providing second-source chips to Intel. The agreement was signed in 1982 and ended in 1986, after which AMD came up with the Am386 microprocessor. It resulted in a legal war with Intel for the coming years.
However, the verdict in their favor from the US Supreme Court in 1994 came in AMD’s favor. In recent years, the company was split into two different segments. One focuses more on the computer and the graphics part, while the other focuses more on the processors for computers.
Advanced Micro Devices acquired ATI in 2006. The company then launched its spin-off manufacturing operations in the shape of GlobalFoundries Inc. The core products that are driving the growth of AMD share price over the last few years include:
- Zen core architecture (released in 2017)
- Zen+ series (released in 2018)
- Zen 3 series (released in 2020)
- Zen 4 series (released in 2022)
The latest Zen 4 series is coming in with recent development, and many people are waiting for it in 2023. Let’s go over the forecast to understand what to expect from AMD in 2023.
Advanced Micro Devices (AMD): Statistical Overview
AMD Stock Price Prediction 2023
The year 2023 holds a great future for the AMD due to its recent developments. Advanced Micro Devices are working on different avenues that can open many opportunities for its growth. Major cloud service providers including Microsoft, Oracle, and Alphabet’s Google have already decided to use AMD’s new processors.
Additionally, server OEMs including Supermicro, Lenovo, and Dell will be producing systems using AMD’s most recent chips.
Due to a rise in the production of game consoles, AMD stock could surge next year. In fiscal 2023, Sony hopes to ship 30 million PlayStation 5 consoles, which are powered by AMD’s semi-custom processors. From its estimate of 18.5 million units in fiscal 2022, it would represent a 64% increase.
Microsoft’s Xbox console shipments are anticipated to increase to 30 million units in 2023, up from the estimated 21 million units this year. This is encouraging for AMD because Microsoft also uses AMD’s chips in its most recent consoles.
AMD Stock Price Forecast for Future
Many experts suggested it as a buy-and-hold stock due to the exceptional returns Advanced Micro Devices offers. The most recent earnings report showed that revenue would be roughly $5.57 billion in Q3 2022, which would be a 29% increase from the previous year, which tells how it has the potential to grow in the future.
Many analysts consider the price to go up by 20.29% compared to the last year. They believe the highest AMD price can go up to around $200, whereas it can fall to $60. According to Wallet Investor’s predictions, AMD stock price can rise to $84.53 in 2023 and can go up to $145.250 in the next five years.
Even the AMD expects the stock value to be around $290 by the mid of 2027. However, it is a challenge to predict and project what the company’s share prices will be in 2030. Stock markets are known for their volatility.
We can anticipate anything to happen that can impact the overall market and bring down any share prices. Nevertheless, proper due diligence can help you know the expected share prices for any company in the years to come.
Historical Analysis of the AMD Stock Price
By doing historical analysis, we can understand the reasons behind the increase in AMD stock price over the years. We can also know about the different reasons that fueled its growth and what lessons we can take from the future. Let’s get right into it.
AMD Stock 2022
2022 was not a particularly fruitful year for AMD. The tech giant’s stock value started 2022 above $140, only to plummet to almost half its value by the end of the second quarter. At its most depressed point in December 2022, AMD shares were selling at an astonishingly low price of less than $70.
Despite the turbulence in price in 2022, AMD acquired Pensando, which is a distributed services platform for $1.9bn, allowing Advanced Micro Devices to increase their data center solutions capabilities. Also, the company completed its acquisition of Xilinx in 2022. Both deals offere great prospects for AMD in the nearest future.
AMD Stock 2021
The AMD share price saw ups and downs throughout 2021, but in the end, it was able to increase by 57. Its share price did see an impact of the Covid-19 pandemic. However, it continued to grow after the lockdown was over, indicating the company’s strong policies. Most importantly, it began to finalize the deal of acquiring Xilinx.
They signed the official agreement in 2022 after finalizing the deal in 2020. The main reasons behind the dips throughout 2021 for the AMD share price were:
- Covid-19 pandemic
- Manufacturing facilities shutdown to lockdown
- Global supply chain issues
AMD Stock 2020
Overall the AMD stock price increased more than 350% in four years. The company stock value was around $59 in February 2020 compared to $35 in 2017. The major reason behind this growth is due to AMD’s steady revenue which gradually increased over the past few years.
The company had total revenue of $5.25 billion in 2017. It further increased to $6.73 billion in 2019. However, AMD surprised everyone with earnings of more than $8.5 billion in 2020. This factor, along with improved liquidity, became the reason behind AMD stock value rise in 2020.
AMD Stock 2019
AMD’s share price growth trajectory remained the same as its predecessor and successor years. The share price increased by 148.4% in 2019 and reached $46 by Christmas 2019. Many factors became the driving force for the increase in the share price.
AMD started production with the 7-nanometer chip traces for their processors. On the other hand, its biggest competitor Intel was only beginning with the 10-nanometer production runs. Also, the AMD presented the highest single-quarter revenue in the last 15 years.
It was the trump card that helped AMC’s share price to enjoy growth and an optimal increase in their P/E ratio.
The announcement on 7 August 2019 for the launch of Zen 2 helped boost the share price up. Before the release of Zen 2, the AMD stock price was around $29 in August 2019. However, by the end of the year, it has gone over the $50 mark, showing the impact of the news.
AMD Stock 2018
2018 was a roller coaster ride for the AMD share price since it saw a decline of 25% in its value within two days in September. Yet, the share price increased by 92% by Nov 2018. It was mainly due to the total revenue and operating income, which saw a growth of 4% and 26% in the 3rd quarter.
Furthermore, AMD’s continuous innovation with the CPU tech for computers and data centers also became a growth factor. It helped increase its sales, boosting the share value in 2019 and the years ahead.
Moreover, the price-to-earnings ratio (P/E) and P/E for the 12-month forward were significantly good, around 68.7 and 31.5, respectively.
AMD Stock 2017
The AMD share price was a bit volatile throughout 2017, but in the end, it increased from $11.34 in Dec 2016 to $11.44 by the end of Dec 2017. Advanced Micro Devices saw an increase in their annual revenue by 25%.
There was a brief rise in the share price of AMD to $15.65. It went to the ten-year high due to the rise in demand for the Ryzen chip for desktop computers. However, the stock price soon came back to the $10 and $11 at the end of the year due to its profitability.
Despite the revenue gains, the stock saw a massive drop in its share price, which was the worse in the last ten years. The main reason behind the stock price drop was the disconnection between the investors and the technological advancements by AMD.
AMD Stock 2016
The AMD stock price saw a rapid surge in 2016 due to various reasons, such as strong Polaris GPU Sales, expansion into different server markets, etc. At the start of the year, the stock price of AMD was around $2.70 to $2.80. However, by the end of 2016, that price went up to $11.34.
The AMD stock price used to be in the bracket of $2 to $5 before 2016. But, it became one of the best-performing stocks in 2016, and its value saw an increase of 300%.
AMD had to take several measures, such as raising $293 million in licensing, to boost its financials. However, the turning point and the reason for the phenomenal growth in the share price were due to the launch of Polaris’ mainstream graphics cards.
AMD Stock Price: Tide Is Changing for Good
According to Raymond James, AMD stock can increase as much as 80% by the end of 2022. The Q1 earnings of AMD highlight that the chip manufacturing company has had significant growth. In fact, AMD is set to deliver more advanced products in the market. This is bound to garner more earnings and revenue for AMD and will have a positive impact on its stock in the market.
On the downside, the chipmaker’s stock did go down by 4% in the first two months of 2022. But now AMD wants to make a turnaround in the stock and earn more revenue in Q2 of 2022. In February 2022, AMD saw a jump in AMD stock due to a positive response from tech reviewers and the success of its new chips.
However, the company had a dwindling stock price throughout march. But after the rollout of new chip products in the market, AMD is ready to make the most out of the current momentum and hopes to take control of the chip manufacturing market.
Like other companies, AMD has started to understand the struggle and effort it takes to recover stock prices. But unlike other chip manufacturers, AMD hasn’t had a significant downfall. In fact, the future growth potential of AMD stock looks more promising than ever.
The company expects to increase its revenue by 45% and gain over $5 billion of growth in a different set of businesses. As the competitive drive between Intel and AMD grows fiercer, all eyes are fixed on AMD to surpass market expectations and further increase its stock price.
Conclusion
The tide may have turned for Advanced Micro Devices, with the stock down more than 50% from its high in 2022. However, many experts remain bullish on the company’s prospects, citing its recent developments and strong partnerships. If you’re looking for a long-term investment that could offer exceptional returns, AMD may be worth a closer look.
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