Advanced Micro Devices AMD Stock News

Advanced Micro Devices, Inc. (NASDAQ: AMD) is making its way for the top in the market this morning after the company’s CEO, Lisa Su appeared in an interview on Barrons. As a result of the news, the stock is up nearly 6% early in the trading session this morning.

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Lisa Su Has Brought AMD Stock To New Heights

Lisa Su joined the team at Advanced Micro Devices back in late 2014. Since her appointment as leader of the charge, the stock has seen tremendous gains, up more than 900% in the few years that she has been in the big seat.

Revenue has been rising. In fact, in the past two years, the company has seen revenue growth of more than 30% per year. In 2018, AMD generated earnings in the amount of $337 million. So, it’s hard to argue against Su’s leadership and the benefit that it has had on the company.

In the beginning of the interview, Su pointed to an early shift toward high-performance computing as a reason for the smashing success that the company had seen since she was appointed.

In fact, she pointed out that back in 2014, high-performance computing was an area where few companies held the IP to compete. So, shifting to this arena would help the company become the leader that it was.

Su also went on to explain that betting on new technologies in 2015 led to strengths that we’re seeing in 2018 and 2019. In fact, she said that the “decisions that [AMD] made in that 2015 to 2016 timeframe were very important technology bets that are now playing out in the roadmap in 2018 and 2019.”

In particular, Su said that the bet on the 7-nanometer technology and being early in that set the stage for a strong foundation. She also explained that AMD made bets on chiplet technoogy, a technoloy that no one was thinking about at that time.

If you haven’t seen it yet, I strongly suggest reading the interview, available here.

Is AMD A Strong Investment Option?

Aside from the interview, a big question among investors is, “following the strong gains that we’ve seen in the stock, is AMD still a strong investment option?” As mentioned in my post back in April, I believe that the answer is yes. There are many reasons for my bullish opinion:

  • R&D Spending – Advanced Micro Devices is spending plenty of money on R&D, but nowhere near as much as its largest competitor, Intel. However, even with a lighter spending load, the company’s research is leading to better results, making it a prime competitor, that could, over time, take the lead in the industry.
  • Analyst Opinions – While I never condone blindly making an investment based on the opinions of analysts, their views are important to take into account. In terms of AMD, analysts love the stock. In fact, a recent coverage initiation by Instinet outlined many of the bullish points that I’m making here. According to TipRanks, the average rating on the stock is a buy.
  • Data Processing Growth – Over the next year, there are expectations of strong growth as a result of the company’s work in the data processing space. Personally, I believe that the sector of the business has the potential to grow by 10% or more in the next year.
  • Competition Hiccups – While AMD continues to execute in key areas like servers, GPUs, data processing, tablets and notebooks, its leading competitor, Intel Corp (NASDAQ: INTC) continues to face troubling news.
  • Strong Revenue Growth – Over the past 3 years, revenue has grown with a CAGR on the upside of 18%. Over the past 2 years, the company has seen annual revenue growth over 20%. Considering the fact that the company continues to take more and more of the market share, this growth is likely to continue.
  • EBITDA Margins – In 2018 EBITDA margins grew to 12%. That number was -2% in 2015, showing that not only is revenue growing, but so too is profitability.

The Bottom Line

The bottom line here is a simple one. Under the leadership of Lisa Su, AMD has seen tremendous growth over the past few years. Due to moves made a few years ago, and continuing innovation, this growth is likely to continue!

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What Do You Think?

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