Opinions
Shannon Saccocia, CIO, Boston Private
Advanced Micro Devices
AMD-Q
BUY
Jun 22, 2022
Stock price when the opinion was issued
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Premium contentAdvanced Micro Devices, Inc. (AMD) is a global semiconductor company which operates in the fields of computing, graphics, and visualization technologies. Known for its high-performance processors and graphics cards, AMD competes robustly with companies like Intel and NVIDIA. Its product line includes Ryzen processors, Radeon graphics cards, and EPYC server processors, positioning it strongly in both consumer and enterprise markets. Social media mentions are up 11.7% in the past 24h.
Good question. The answer is that it doesn't matter, because the market response is extraordinary for these things. Anybody's evaluation of it doesn't tell you why this stock should be up 25-30% in a day for such a large company.
So the analysis doesn't matter. He's more interested in the market response, which tells you about the speculative nature of the market we're now in. And it could last days, months, maybe years. AI is still very early, and everybody gets really excited about it.
Premium contentAMD reported a revenue of 7.69B, which is a 3.3% change from the previous quarter. An increase in revenue typically indicates growing demand for the company's products or services. This positive change in revenue is a good sign, suggesting that the company's sales are moving in the right direction. Gross Profit stood at 3.06B, marking a -10.6% change since the last quarter. Gross profit showcases the efficiency in production and sales processes. Social media mentions are up 30.9% in the past 24h.
Challenging couple of years, recently took off (mostly because of the OpenAI deal). Before that, the 200-day MA was falling. 46x forward PE for ~30% growth (which has really taken off). Many analysts have raised estimates.
He owns NVDA instead. It's cheaper, and he likes it more.
Deal with OpenAI, which leads to discussions of circular economics -- does a deal with a promise of business in the future. The deal itself propelled the stock quite a bit higher, but he's not sure it deserves the valuation bump. The effect is quite dilutive. In third place behind NVDA and AVGO.