Shares of Advanced Micro Devices Inc. (NYSE: AMD) been on fire and there are many reasons to buy them at the current, reasonable entry level. This global semiconductor company’s products include x86 microprocessors as an accelerated processing unit, chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services. They also include server and embedded processors, and semi-custom System-on-Chip (SoC) products, development services and technology for game consoles.
AMD provides x86 microprocessors for personal computers under the AMD Ryzen, AMD Ryzen PRO, Ryzen, Threadripper, AMD A-Series, AMD FX, AMD Athlon, AMD Athlon PRO and AMD Pro A-Series processors brands. It provides microprocessors for notebook and 2-in-1s under the AMD Ryzen, AMD A-Series, AMD Athlon, AMD Ryzen PRO, AMD Athlon PRO and AMD Pro A-Series processors brands, as well as microprocessors for servers under the AMD EPYC and AMD Opteron brands. Its chipsets are sold under the AMD trademark.
The analysts are very bullish on an upcoming product launch:
Buy ahead of Milan server CPU launch on March 15th, product/partnership announcements could help re-energize stock. The EPYC-1 launched in June 2017 and since unit share is up to 8% from 0.4% and average selling price to $700+ from $200-$300 prior; Milan can drive higher. Dependable roadmap enables share gains and AMD is already looking towards Zen 4 (5nanometer Genoa in 2022) and Zen 5 in concept design.
The $115 BofA Securities price target on Advanced Micro Devices stock compares with lower $105 the consensus and the most recent close at $78.53 after a 6% increase on Tuesday.
Sector leader Nvidia Corp. (NASDAQ: NVDA) made a huge purchase last year that is proving to be a solid tailwind for the company. While it rarely has grown through acquisitions, Nvidia bought Mellanox and paid a whopping $6.9 billion in cash. The deal closed back in April of 2020.
In what actually was somewhat of a duel, Nvidia knocked out Intel in its bid to buy the chipmaker, and the deal has helped Nvidia boost its business of making data center chips that help power cloud computing.
Mellanox’s BlueField intelligent network adapters are another version of data center co-processing acceleration. Top Wall Street analysts see the combination of Nvidia and Mellanox as a definite threat to Intel’s data center CPU dominance of workloads.
Nvidia recently outlined a $100 billion total addressable market for its data center business by 2024, or twice the $50 billion outlined at its last investor day. The upside includes $20 billion from core Mellanox networking, $10 billion from new class of data processing units and another $10 billion from the emerging edge AI EGX computing platform.
Top analysts continue to believe the company’s exposure to some of the most exciting areas of growth in tech (gaming/esports, autonomous driving, artificial intelligence and server acceleration) will drive well above industry growth over the next few years.
BofA Securities has set a massive $675 price objective. The consensus figure is $596.59, and Nvidia stock ended Tuesday at $500.81 a share. That was up over 8% on the day.
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