𝗔𝗻 𝗜𝗻𝗰𝗿𝗲𝗱𝗶𝗯𝗹𝗲 𝗧𝘂𝗿𝗻𝗮𝗿𝗼𝘂𝗻𝗱 𝗳𝗼𝗿 𝗔𝗠𝗗 💻
With all due respect to Intel (NASDAQ: $INTC ), the chip industry has been a two-horse race for the better part of the last year. The emergence of NVIDIA (NASDAQ: $NVDA ) and AMD (NASDAQ: $AMD ) have pushed the former industry leader arguably into third place in the sector.
AMD’s stock is coming off one of it’s best years in the company’s history, and although it has pulled back recently, most industry experts are expecting AMD to continue to rise into the fourth quarter of 2021. So far in 2021, shares of AMD are only up 15% after the latest pullback, and have returned about 23% over the last 52-weeks.
𝗔𝗠𝗗 𝗵𝗮𝘀 𝗶𝘁𝘀 𝗵𝗮𝗻𝗱𝘀 𝗶𝗻 𝗲𝘃𝗲𝗿𝘆𝘁𝗵𝗶𝗻𝗴 👐
One of the reason’s AMD has been a high flyer this year is because its CEO Dr. Lisa Su has worked hard to diversify AMD’s product portfolio. No longer is AMD just a graphics card maker, but it has spread out into up and coming industries like Cloud Supercomputing, 5G and other telecommunications infrastructure, Data analytics, Artificial Intelligence, Autonomous Vehicles, and of course next-generation gaming.
AMD’s data center segment has actually surpassed its PC and gaming segments, as its data center GPUs and CPUs account for a staggering $35 billion total addressable market.
𝗔𝗠𝗗 𝗵𝗮𝘀 𝗺𝗮𝗱𝗲 𝘀𝗼𝗺𝗲 𝗵𝗶𝗴𝗵 𝗽𝗿𝗼𝗳𝗶𝗹𝗲 𝗽𝗮𝗿𝘁𝗻𝗲𝗿𝘀𝗵𝗶𝗽𝘀 🤝
AMD won the impressive contract for providing chips for the new Sony Playstation 5 and Xbox consoles, which has put it in the clear lead in the gaming industry. Another impressive win for AMD was being included in the gaming rigs and infotainment systems on new Tesla (NASDAQ:TSLA ) vehicles. Just a few years ago it would have never been AMD winning these contracts, but Su has transformed the company into a true industry leader.
AMD also provides chips for Samsung smartphones, and some of its other pieces of hardware. Finally, AMD recently closed the $35 billion deal for Xilinx, which is expected to be completed by the end of 2021.
𝗔𝗠𝗗’𝘀 𝗦𝘁𝗼𝗰𝗸 𝗵𝗮𝘀 𝗥𝗼𝗼𝗺 𝘁𝗼 𝗚𝗿𝗼𝘄 📈
The elephant in the room is the ongoing global chip shortage that has affected production and supply chains around the world. AMD relies on companies like Taiwan Semiconductor (NYSE: $TSM ) and ASML (NASDAQ: $ASML ) to make its chips and chip components. While some people, like Tesla CEO Elon Musk, are optimistic that the shortage should be more or less resolved by 2022, others are not as hopeful.
If anything, this shortage has taught us just how important these companies are to the future of our technology. With more products requiring chips these days, these companies may be the tech industry leaders in the future. AMD has had a great year so far, but those looking back at the year to date results may be surprised that it has not returned more than it has.
AMD’s data center segment alone is reason to be excited about the stock, but seeing all of the different sectors that Su is attacking should make even the most skeptical investors bullish on AMD for the future.