Posted 3w ago
Everyone around me is suddenly talking about Advanced Micro Devices (AMD) as a stock to buy. I Googled for news and found that it posted strong quarterly results. What are your thoughts on the company?
Hi there anon, yes you are right. AMD had a strong quarter.
AMD's revenue for the first quarter of 2021 rose 93% year-on-year to US$3.45 billion, driven by higher revenue in both the Computing and Graphics and Enterprise, Embedded and Semi-custom segments.
Net income more than trebled to US$555 million.
The strong growth was despite constant product shortages for its consumer CPUs and GPUs on the back of pandemic-driven supply chain disruptions.
Dr. Lisa Su, AMD president and CEO, said the following in its earnings release:
“Our business continued to accelerate in the first quarter driven by the best product portfolio in our history, strong execution and robust market demand. ... We had outstanding year-over-year revenue growth across all of our businesses and data centre revenue more than doubled. Our increased full-year guidance highlights the strong growth we expect across our business based on increasing adoption of our high-performance computing products and expanding customer relationships.”
For the full year 2021, AMD expects revenue growth of around 50% higher than 2020 due to growth in all businesses, up from its prior guidance of around 37% annual growth.
If you are looking to invest in a consumer-facing company, AMD is one company you might want to research.
Shih Tzu Mansss
To add on, their chips has overtaken / on par with Intel chips over the past few years since their debut of 3600x. You can research on their recent flagship chipset 5600x which is crowned the best chip for 2020 generation by most of the reviewer. The adoption rate of AMD chipset over Intel has increase tremendously over the years too, basic most builds for the PC nowadays will pick AMD over Intel. IMO, looking at their product roadmap for this year and next year, there are much more room to grow and i believe they will out do themself. Looking at Zen4 in particular which is their next product inline that will release end of this year. Not forget to mention their partnership with SONY in PS5 chips, look how PS5 sold out all over the world due to chip shortage, this is good news for AMD in the long run. AND lastly not to forget their acquisition of Xilinx, u can go research more bout it OP!
Disclaimer: This is not financial advice. Please do your own due diligence before investing in any investment product or stock.
As Sudhan has mentioned AMD had a strong quarter
Strong Balance Sheet: AMD also quite well capitalised with a Debt to Equity Ratio of 9.8%
Rising Free Cash Flow: AMD’s free cash flow as % of revenues increased to 24.2% from a negative number a year ago and the ratio saw successive improvements in FY 2020. For every dollar in net revenues, AMD now generates $.24 in free cash flow - and this percentage could rise to 30% by year-end. Since AMD will have sales of around $14.6b in FY 2021, AMD’s free cash flow could easily exceed US$4b this year. This money could be used to do more research and development and extend their competitive advantage.
Strong Product Lineup: For example, AMD has just scored a landscape victory in the German market with the retailer MindFactory reporting that they were able to sell over 35,000 Ryzen 5000 & Ryzen 3000 CPUs while Intel’s processors only managed over 5000 sales in the month of November. The detailed numbers posted by Reddit user, Ingebor, show just how big of a demand there is for AMD’s Ryzen CPUs compared to Intel’s offerings.
Good Management Team: Dr Lisa Su the CEO and her team has really turned things around. She brought the company on the brink of bankruptcy to what it is today.
Strangely the stock keeps dipping despite such a strong quarter. The stock price fell about 8% from Wednesday to Thursday.
But some risks:
If you semiconductor exposure, can consider TSMC (foundry), ASML (capital equipment) and KLAC (proce...
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