AMD Stock Is Down And Price Targets Are Stock, But Only For Now!

  • Since AMD added capital gains Q1/2016 and Q1/2017. The stock is down and price targets are stuck.
  • Advanced Micro Devices (AMD) has rallied about 740% from the Q1 of 2016 and Q1 of 2017. Since then, the stock is down 33% with a negative YTD performance of about -11%. Is this a continuing trend into 2018 or is this an interesting trade you are missing?
  • But Now AMD is showing growth while the total tech industry is in an upswing

Graph 1 that compares AMD’s stock price to leading computer & electronics sentiment. This sentiment indicator can go as high as 12 and as low as -12. Stocks on the other hand can go much higher (obviously). That’s why it makes sense to use a year-on-year comparison as you can see below. What might look like the most useless graph in history is actually quite value-adding. AMD has lost all its momentum after catching up in 2016. The performance is back below zero which is a very interesting point to buy the stock in case sentiment stays high. Along with AMD all major semiconductor companies were able to reach great revenue growth numbers since the first quarter of 2016. Especially AMD turned double-digit contraction into what looks like sustainable double-digit growth Graph 2. Even though it seems that the new Ryzen 5 and 7 are doing very well so far with up to 40-50% market share as of the third quarter of 2017 the 2018 is going to be challenging when all the new releases happen probably near March to June 2018.

2018 To Be A Successful Year For AMD

In AMD’s world, it is key that 2018 is going to deliver. Just to show AMD has a chance against NVIDIA (NVDA) and to continue the positive EPS and sales trend that started in the first quarter of 2016. 6 main areas that will determine whether AMD is going to be successful in 2018 are as follows:

1. New Ryzen CPUs

AMD scored a on its new Ryzen CPUs, that offered comparable performance as Intel’s (NASDAQ:INTC) current-generation Kaby Lake CPUs at lower prices. AMD also launched the high-end Threadripper that has up to 16 cores and challenged Intel’s I9 in the highest end of the cpu market.

2. New Vega GPUs

Nvidia Volta-based GPUs are now only for AI and supercomputing customers, NVIDIA has plans to launch the consumer versions in 2018. AMD plans to counter Volta with its next-generation 12nm Vega 2nd gen GPUs.

3. The Intel-AMD deal

In a strange deal, AMD recently partnered with Intel to integrate its Radeon graphics into Intel’s upcoming chipset for ultra-thin laptops. This partnership is risky, since it could curb demand for AMD’s own Raven Ridge APUs. but it is depended on how much of a big thing it is and how much GPUs intel needs from AMD. The potential costumers are Microsoft surface or apple or even Intel mini PCs along with thin laptops.

4. Strong EESC performance

AMD’s EESC (Enterprise, Embedded, and Semi-Custom) business became a pillar of growth over the past few years as it supplied semi-custom SoCs to leading gaming consoles like the Xbox One and PS4 and Ataribox.

5. Artificial Intelligence AI GPU products (Instinct GPUs)

AMD has a strong platform in AI and already working with companies like Tesla to develop the AI tools in auto industry. More and more deals like Tesla can help AMD grow in the huge 30 Billion AI market.

6. Datacenter CPUs (EPYC CPUs)

sc17 was a good time for AMD to show off new Datacenter products like EPYC CPUs they have made with Zen platforms. AMD actually could get so many new costumers like Microsoft, Asus and Biado. Pushing the Datacenter Market can help AMD succeed in 2018 as well.

graph that compares AMD's stock price to leading computer & electronics sentiment.

Graph 1 that compares AMD’s stock price to leading computer & electronics sentiment.

AMD NVDA INTC

Graph 2 – AMD NVDA INTC

Tags: Technolog, AMD, finance, NVDA, INLC, amd stocks, amd value, amd revenue, amd growth, amd vs nvda, NASDAQ:INTC, NASDAQ:AMD

Mohsen Daemi
Latest posts by Mohsen Daemi (see all)