Stock Price Advanced Micro Devices (NASDAQ: AMD) It’s up 454% over the past five years. If you had invested $10,000 in AMD in June 2019, it would be worth $55,410 today. That’s a lot of growth in a relatively short period of time. Can AMD continue to grow at this pace over the next five years?
This semiconductor giant continues to expand its market share. Intel The company dominates the central processing unit (CPU) market, but it’s also eyeing another business opportunity in artificial intelligence (AI), which could deliver big returns for shareholders over the next five years.
Why buy AMD stock?
At this point in 2019, AMD was executing on the growth strategy it outlined to investors at its financial analyst day in May 2017. AMD was looking to improve gross margins by shifting sales toward higher-end chips such as graphics processing units (GPUs) that generate higher profit margins, and it was also looking to enter the CPU server market, which was dominated by Intel.
By 2019, AMD’s margins, revenues, and earnings are trending upwards and are expected to grow further.
However, AMD’s revenue grew just 2% year-over-year in the first quarter due to weak demand for gaming GPUs and weak sales in other markets, segments that may not recover within the next 12 months.
AMD shares are currently down about 32% from their last peak, so now may be a great time to buy shares. With first-quarter revenue up 80% year over year, the opportunity in the data center market looks enormous.
AI is opening up new markets for selling chips and is fueling AMD’s data center growth. Edge AI, where processing happens on devices or local servers closer to the user, represents a big opportunity to drive robust chip demand across more devices.
Growth expectations are rising and the recent sell-off makes it a good time to buy shares.
Should you invest $1,000 in Advanced Micro Devices right now?
Before buying Advanced Micro Devices shares, consider the following:
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John Ballard invests in Advanced Micro Devices. The Motley Fool invests in and recommends Advanced Micro Devices. The Motley Fool recommends Intel and recommends buying January 2025 $45 calls on Intel and selling August 2024 $35 calls on Intel. The Motley Fool has a disclosure policy.
If You Invested $10,000 In Advanced Micro Devices Stock Five Years Ago, Here’s How Much You’d Have Today originally appeared on The Motley Fool.
