Advanced Micro Devices Share Price Forecast November 2021 – Time to Buy AMD?
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Shares of American multinational semiconductor company Advanced Micro Devices(NASDAQ: AMD) are in the green today, closing at $127.63 as of November 2nd, (23:57 EDT). The company recently released its third-quarter earnings report, which indicated great metrics for interested investors.
Advanced Micro Devices – Technical Analysis
According to the financial statement, Advanced Micro Devices has a market cap of $154.127 billion with total assets worth $11.153 billion. Revenue for 2020 was at $9.76 billion with a profit margin of 25.50% compared to $6.73 billion in 2019. According to the metrics provided by the third-quarter earnings report, AMD’s revenue increased by 54% year over year to $4.31 billion, surpassing estimates by $200 million. It expects its 4th quarter revenue to increase by 39% year over year.
Moving averages such as Exponential Moving Average (10)(121.38), Simple Moving Average (10)( 121.74), Exponential Moving Average (20)(117.12) and Simple Moving Average (20)(115.41) is indicating a buy action. On the other hand, oscillators such as Relative Strength Index (14)(76.91), Stochastic %K (14, 3, 3)(83.17), Commodity Channel Index (20)(124.99) and Average Directional Index (14)(41.37)are neutral.
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Recent Developments
AMD was in serious trouble seven years ago as its newest CPUs at the time performed poorly against Intel’s CPUs while also competing against Nvidia in the high-end GPU market. 2014 saw the appointment of Lisa Su as CEO who managed to turn around the company. She launched a new generation of Ryzen CPUs for PCs and Epyc CPUs for servers which were well received by original equipment manufacturers (OEMs). AMD’s share in the entire x86 CPU market increased to 39.4% from 23.4% as it won against Intel across server, laptop and desktop markets. AMD has continued to sell custom-made APUs for Microsoft and Sony gaming consoles. AMD’s EESC business recoded 183% year-over-year revenue growth to reach $1.6 billion in the quarter which could complement AMD’s massive prospects.
AMD’s computing and graphics segment experienced a 44% increase year-on-year and 7% quarter-on-quarter growth, bolstered by high processor sales. CEO Lis Su made three comments worth noting during the earnings call. She pointed out that while the company’s GPU market is growing remarkably well, it still makes up a small portion of its business. She also mentioned that the company is ahead of its competitors in server processor sales in China. She also shed light on how AMD’s third-generation data center processor in Milan is experiencing more substantial adoption than ever before.
Should You Buy AMD Shares?
Inspite of being a red-hot stock over the past year, AMD still looks reasonably valued at 40 times forward earnings. This may seem more expensive than Intel which trades at 11 times forward earnings. However, the company’s third-quarter report gives us an indication that a turnaround isn’t on the cards yet. While pressure from Intel may generate unpredictability for AMD over the next few years, it has still an overall brighter future compared to Intel.
According to a survey in popular game distribution platform Steam, AMD has cornered 30% share of the PC (personal computer) CPU market already. Revenue estimates for AMD are $15.7 billion, $18.2 billion and $20.7 billion for 2021,2022 and 2023 respectively. Analysts have predicted a 32% plus earnings growth annually for the next five years which can ve sustained growth for the share price. This will help it achieve its long-term target of becoming a trillion-dollar company.
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