2024-06-24 17:23:12 ET
Summary
- Advanced Micro Devices, Inc. stock has surged due to expected growth in the AI industry, with revenue rising yearly since 2020.
- The company faces competition from Nvidia and Intel in the chipset space, with the potential for a price war impacting AMD.
- The growing R&D costs of AMD may be adding additional risk.
- While AMD has strong fundamentals, it's vital to examine its real value before investing.
Advanced Micro Devices, Inc. (AMD) has seen a major upswing in its stock as artificial intelligence industry growth continues to be on investors' minds. Revenue has risen yearly since 2020, and the company has rebounded from its previous lows many years ago. AMD graphics cards and chipsets have increased competition in the industry that was thought to only feature NVIDIA Corporation (NVDA) as the dominant player. The back half of 2024 is anticipated to feature growth for AMD, as the recent supply chain issues have subsided with its product lines.
As mentioned, AMD stock has seen large increases because of expected growth in the AI industry. Research and Development costs have, however, been eating away at operational profits as AMD looks to keep up with Nvidia in the AI chipset space. AMD continues to face strong competition from Nvidia and Intel in the chipset space and attempts to position itself as the one to beat in this market. Even with its recent chipsets launched to gain market share in the AI market, Nvidia has so much margin and weight that an eventual price war could erupt that would impact AMD considerably. The second half of 2024 should see an upswing and could propel further growth in the stock, but these long-term headwinds will still weigh down the stock overall....
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AMD And Its Real Value