Is Advanced Micro Devices A High Growth Semiconductor Stock That’s Profitable? – Insider Monkey
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When it comes to media and investor attention, semiconductor stocks are among some of the hottest right now. This is because of artificial intelligence, and the expected shift to accelerated computing for businesses and consumers. The PHLX Semiconductor (SOX) index has surged by more than 50% between May 2023 and 2024, while some individual stocks have fared even better. Therefore, we decided to take a look at several high growth semiconductor stocks that are profitable in 2024, one of which is Advanced Micro Devices, Inc. (NASDAQ:AMD).
Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the few companies in the world that can design and sell processors on the x86 design rules. This has allowed it to maintain a presence in the personal computing, notebook, and enterprise computing market for years. Advanced Micro Devices, Inc. (NASDAQ:AMD) also sells custom chips used in gaming consoles, and chips designed specifically for customized use cases.
Advanced Micro Devices, Inc. (NASDAQ:AMD)’s latest financial results were for the first quarter of 2024. These saw the firm’s annual growth taper down to 2%. However, Advanced Micro Devices, Inc. (NASDAQ:AMD)’s data center business division, which measures the money it makes from selling chips to businesses or for business use cases, grew by 80% annually with revenue sitting at $2.3 billion to set a new all time record. Yet, despite data center segment roaring, AMD’s EPS of $0.62 beat analysts’ estimates of $0.61 by a hairline.
Advanced Micro Devices, Inc. (NASDAQ:AMD)’s growth story is one of the most well known on Wall Street. The semiconductor industry of the 2000s saw AMD play hide and seek with larger rival Intel. After its current CEO Dr. Lisa Su took over, Advanced Micro Devices, Inc. (NASDAQ:AMD) started to grow revenue and ship products made in Taiwan. As an example of revenue growth, consider Advanced Micro Devices, Inc. (NASDAQ:AMD)’s annual revenue in 2020 and 2023. Sitting at $22.6 billion in the latter period, it marks a 133% absolute growth, making a five-year annualized growth rate of 28% unsurprising as well.
Due to its hefty market capitalization of $265 billion, Advanced Micro Devices, Inc. (NASDAQ:AMD) is always seeing plenty of analyst coverage. The average of 40 one year analyst share price targets for the firm is $187, and the average share rating is Strong Buy. Amongst these, the highest and lowest Advanced Micro Devices, Inc. (NASDAQ:AMD) price targets are $250 and $125. Talking about ratings, Evercore ISI reiterated an Outperform rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) in May 2024, but cut the share price target to $193 from $200. Evercore set an Outperform rating in April, as it expected Advanced Micro Devices, Inc. (NASDAQ:AMD) to benefit from a shift in global computing trends.
Looking at its analyst ratings and data center performance, it’s hard to not be impressed by Advanced Micro Devices, Inc. (NASDAQ:AMD). However, its shares didn’t do so well in 2022 when interest rates were soaring and inflation was high. Yet, thanks to AI, 2024 is a transformed environment for high growth stocks like Advanced Micro Devices, Inc. (NASDAQ:AMD). Even still, as inflation continues to create worries about higher interest rates, readers might be interested in value stocks that might offer a greater bang for the buck and some hope for stability.
At Insider Monkey we are closely following the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
For some such stocks, you can read Seth Klarman 2024 Portfolio: Top New Stock Picks.
Disclosure: None. Is Advanced Micro Devices, Inc. (NASDAQ:AMD) A High Growth Semiconductor Stock That’s Profitable? was originally published on Insidermonkey.com.
NASDAQ:AMDYahoo FinanceDaily NewsletterAdvanced Micro Devices Inc. (NASDAQ:AMD)Is Advanced Micro Devices Inc. (NASDAQ:AMD) A High Growth Semiconductor Stock That’s Profitable?
Returns since its inception in May 2014 (through May 20, 2024)
Warren Buffett
Berkshire Hathaway
$293,447,417,000
David Einhorn
Greenlight Capital
$1,491,303,000
George Soros
Soros Fund Management
$5,416,602,000
Jim Simons
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$77,426,184,000
Leon Cooperman
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Carl Icahn
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John Paulson
Paulson & Co
$3,510,256,000
David Tepper
Appaloosa Management LP
$4,198,712,000
Paul Tudor Jones
Tudor Investment Corp
$6,160,740,000
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