AMD stock prediction has been a continuous debate on finance news channels. Stock analysts are bullish on AMD stock price because they believe AMD is going to rule the semiconductor industry.
There is no doubt that the chip market is growing faster than previously, but will this assure AMD stock growth? Can AMD beat Intel or NVIDIA?
As a stock investor, perhaps your mind asks you the above burning questions & you cannot decide whether you should buy AMD stock.
If you are looking for a detailed analysis of AMD stock, then this article could be a time savior for you. This blog article covers the maximum questions that a stock investor needs to know before deciding to buy AMD stock.
Let’s start with the following.
Key takeaways:
- AMD has a better chance to expand the market due to growing acceptance.
- AMD stock has a good possibility to be high-performing, but there is little chance to beat Nvidia.
- If Intel focuses on manufacturing, then the growth level of AMD may slow.
- Political instability may be a negative factor for the AMD market. So, a stable geographical situation will help AMD stock to be more profitable.
- The semiconductor industry has a positive upward trend over time. So, AMD stock has a good chance to be a high-performing stock.
What is advanced microdevices?
Advanced Micro Devices (AMD) is an American semiconductor company renewed for designing & manufacturing GPU & CPU technologies. AMD is located in Santa Clara, California., & also run operation in Austin, Texas.
AMD also upgrades existing microprocessors & buy other tech product to make them more efficient than before. With continuous growth & acquisition, AMD has become a leading provider of CPU, servers, GPU, HPC & AI.
Due to excellent market performance, AMD is now giving strong competition to Intel for the CPU market & NVIDIA for the GPU market.
Does AMD stock pay dividends?
No. AMD stock doesn’t pay dividends & also has no plan for the future. AMD strategically plans to reinvest its profits to catch a growing market trend.
The market expert groups of AMD believe that Advanced Micro Devices products & services will be in high demand in the upcoming time. So, AMD decided to reinvest its profit into research and development, new product launches, and market expansion.
AMD stock analyst target price?
Analysts are bullish regarding AMD stock price. Their stock analysis suggests a profitable investment due to the positive growth of processor technology & the semiconductor industry.
Stacey Rasgon (Bernstein) is bullish on the $250 target price due to AMD’s AI and cloud computing exposure. Other hand, Cohn & Steers are bullish on $225 for processor technology’s future growth & Matthew Bryson (Wedbush) is bullish on $210 for strong long-term financial performance.
Below, the table details AMD stock’s analyst target price for 2024 to 2030.
| Firm name/ Analyst | Min ($) | Max ($) | Median ($) | Range ($) | Years |
| Traders Union | 142.50 | 200 | 210.36 | 142.50 – 200 | 2024 |
| Raveen Chawla on Medium | 150 | 210 | 248.63 | 150 – 210 | 2024 |
| Traders Union | Not reported | Not reported | 293.87 | Not reported | 2025 |
| Traders Union | Not reported | Not reported | 347.33 | Not reported | 2026 |
| Traders Union | 400 | 500 | Not reported | 400 – 500 | 2027 |
| Traders Union | 450 | 550 | Not reported | 450 – 550 | 2028 |
| Traders Union | Not reported | Not reported | 485.21 | Not reported | 2029 |
| Traders Union | Not reported | 946.92 | 485.21 | Not reported | 2030 |
AMD stock analysis?
Below, I have given an accounting data analysis of AMD so that you can understand the past performance of AMD stock.
| Financial Items | 2019 (Million $) | 2020 (Million $) | 2021 (Million $) | 2022 (Million $) | 2023 (Million $) |
| Total Assets | 4,556 | 6,028 | 8,962 | 12,419 | 67,580 (sequential growth) |
| Current Assets | 3,540 | 4,597 | 6,143 | 8,583 | 15,019 |
| Short-Term Investments & Cash | 1,161 | 1,507 | 2,290 | 3,608 | 5,855 (positive trend, means more capable for future investment) |
| Inventories | 845 | 982 | 1,399 | 1,955 | 3,771 |
| Non-Current Assets | 1,016 | 1,431 | 2,819 | 3,836 | 52,561 |
| Total Liabilities & Shareholders’ Equity | 4,556 | 6,028 | 8,962 | 12,419 | 67,580 |
| Current Liabilities | 1,984 | 2,359 | 2,417 | 4,240 | 6,369 |
| Long-Term Debt | 1,114 | 685 | 531 | 349 | 2,863 (Fluctuate but somehow manageable) |
| Shareholders’ Equity | 2,572 | 3,669 | 6,545 | 8,170 | 61,211 (positive trend means the believe of shareholder has grown over 5 years) |
Income statement and cash flow statement?
Below, I have given an Income statement and cash flow statement analysis of AMD.
| Particular’s | 2019 (Billions$) | 2020 (Billions$) | 2021 (Billions$) | 2022 (Billions$) | 2023 (Billions$) |
| Sales Revenue | 6,475 | 6,731 (positive trend) | 9,763 (positive trend) | 16,434 (positive trend) | 23,601 (positive trend over 5 years, indicating strong market performance) |
| Cost of Goods Sold | 4,028 | 3,862 | 5,416 | 8,505 | 15,098 |
| Gross Profit | 2,447 | 2,869 | 4,347 | 7,929 | 8,503 (stable means efficient cost management accounting) |
| Operating Expenses | 1,991 | 2,280 | 2,964 | 4,251 | 6,889 |
| R&D Expenses | 1,430 | 1,543 | 1,983 | 2,845 | 5,005 |
| Operating Income | 456 | 589 | 1,383 | 3,678 | 1,614 |
| Miscellaneous Expense | 15 | 189 | 68 | (7) | 514 |
| Non-Operating Income/Expense | (8) | 51 | (1) | 10 | 107 |
| Earnings Before Tax | 443 | 730 | 1,420 | 3,681 | 1,207 |
| Income Taxes Provision | 162 | 236 | 510 | 1221 | 493 |
| Net Income | 281 | 494 | 910 | 2,460 | 714 |
| Particular’s | 2019 (Billions$) | 2020 (Billions$) | 2021 (Billions$) | 2022 (Billions$) | 2023 (Billions$) |
| Operating Activities | 34 | 493 | 1,071 | 3,521 | 3,565 |
| Net Cash | |||||
| Working Capital Changes | (727) | (542) | (931) | (774) | (1,846) |
| Net Cash Flow from Operating Activities | (693) | (49) | 140 | 2,747 | 1,719 |
| Investing Activities | (657) | (867) | (1,304) | (2,014) | (3,260) |
| Capital Expenditures | |||||
| Net Cash Flow from Investing Activities | (657) | (867) | (1,304) | (2,014) | (3,260) |
| Financing Activities | 1,695 | 3,559 | 4,013 | 2,156 | 1,746 |
| Stock Issuance | |||||
| Stock Repurchase | (2,355) | (2,017) | (1,441) | (3,157) | (1,668) |
| Net Cash Flow from Financing Activities | (660) | 1,542 | 2,572 | (1,001) | 78 |
| Net Cash Flow | (1,410) (invested heavily to expand market) | 118 (significant amount of liquid money reserve for short term obligations & focus on medium size invested) | 1,308 (few invested & focuses more on operating solvency) | 732 (make some big investment) | -1,563 (invested heavily on new products & services) |
AMD stock earnings?
Below, I have given a financial analysis of AMD to predict the future growth of AMD stock.
| Years | EPS ($) | Data sources |
| 2019 | 0.27 | Nasdaq Investor Relations, Zack’s Investment Research |
| 2020 | 2.06 | Nasdaq Investor Relations, Zack’s Investment Research |
| 2021 | 2.57 | Nasdaq Investor Relations, Zack’s Investment Research |
| 2022 | 0.84 | Nasdaq Investor Relations, Zack’s Investment Research |
| 2023 | 0.77 | Nasdaq Analyst Ratings, Yahoo Finance Analyst Estimates |
- AMD EPS earnings history chart by year?
AMD’s EPS earnings history chart shows a fluctuating pattern. Started with the lowest earning per share, but next two years it reached a significantly high level. This higher EPS indicates AMD’s strong market performance & significant profit recovery ability. So, they made enough strategic plans to expand their products & surprisingly a large number of customers accept it.
But EPS drastically falls from 2022 to 2023. That means AMD started to lose market dominance. AMD perhaps faces huge competition in the semiconductor market & could not beat big giants like Nvidia & Intel.
AMD’s historical EPS performance doesn’t assure 100x stock growth. So, AMD stock would be a profitable but not be semiconductor market giant.
- AMD stock EPS forecast
- AMD stock ratio
| Ratio | 2019 | 2020 | 2021 | 2022 | 2023 |
| Quick Ratio | 1.18 | 1.25 | 1.34 | 1.52 | 1.77 (Enough liquid money to meet short-term obligations) |
| Operating Margin (%) | 6.42 | 7.99 | 10.31 | 11.64 | 6.84 (overall positive but need more focus for effective cost management and profitability |
| Enterprise Value/EBIT | 15.74 | 13.42 | 18.96 | 24.51 | 37.45 (positive trend means less risk to be undervalue stocks) |
| Interest Coverage | 5.39 | 9.51 | 12.98 | 14.25 | 18.34 (Has improved interest payments ability) |
| Debt-to-Capital -D/E (%) | 10.09 | 8.42 | 6.19 | 5.39 | 5.12 (Steadily decreases financial risk) |
| Return on Equity (%) | 5.60 | 7.78 | 12.33 | 15.33 | 4.24 (low i.e., profitability related to shareholders’ equity |
- AMD stock pe ratio
| P/E ratio | Years |
| 856.83 (too pricy stocks) | 2019 |
| 29.83 (stock is cheap & good possibility to rise price in future) | 2020 |
| 76.20 (stock price fluctuates but manageable & has possibility to rise in future) | 2021 |
| 123.09 (stock price again fluctuates but good for investors) | 2022 |
| 1,159.42 (stock is very expensive but good for previous investors. There is a chance to fall stocks price again & new investors will get an opportunity to buy) | 2023 |
- AMD price to sales ratio
| P/S ratio | Years |
| 14.25 | 2019 (Good investment performance) |
| 3.60 | 2020 (Fluctuate) |
| 5.96 | 2021 (rise) |
| 7.51 | 2022 (again rise) |
| 10.0966 | 2023 (some fluctuate but positive trend which indicate that AMD stocks are generating more revenue for every Dollar investment) |
Is AMD a good stock to buy?
Yes, AMD is a good stock to buy. AMD stock has many positive signs of being a high-performing share.
Below, I have analyzed in detail why AMD stocks a buy.
AMD stock price chart
The AMD stock price chart shows a volatile nature over five years. AMD stock is struggling to fix a stable price, which indicates tough competition from competitors. It started with below $25 & reached more than $160 at the end of 2021. AMD had faced short sales & high operating expenses. However, AMD tried to balance cost vs revenue but failed to keep it up to next year.
Two thousand twenty-three is good for AMD; they may have increased sales & lower operating costs. 2023 also suggests growing demand for semiconductor products, & customers’ positive attitude towards AMD. Adaptability is a good sign for AMD stock that helps to grow market share. AMD reached $138, about an 80% price increase from the last five years.
Now, let’s come to the point: Will the price of AMD increase in the future?
- If AMD focuses on market expansion by lowering costs, then AMD stock price will increase.
- AMD has two main competitors: Intel & NVIDIA. AMD could be an equivalent company to Intel, but beating NVIDIA would be very challenging. So, AMD’s share price will rise to a certain level.
- If everything is okay, AMD’s share price could rise to 20% to 50% from the current market price (stock price is $138 based on the article writing date).
- AMD stock split history
AMD stock split undergoes six times with a ratio of either 3 for 2 or 2 for 1. This split history suggests AMD’s strategic plan to attract more investors at affordable prices. It also benefits existing shareholders because they will get more shares at lower prices.
AMD’s stock split will help to grow the semiconductor market & balance over price of stock. So, there is little chance of facing a liquidity crisis or too-pricy AMD stock.
But you may ask yourself, is too many stocks split good for investors?
The straight answer is a stock split is not good or bad. Rather, it is neutral for investors. Your stock value will not change, but your overall position will change. You can consider the stock split history of Microsoft; they split nine times from 1987 to 2003 to balance the price of stock & attract more retail investors. Later, Microsoft stock became a profitable investment.
However, a stock split occurred between 1978 to 2000, but no further stock split after 24 years. So, if a stock split brings financial benefit for investors & company, then AMD can decide to split its stock again.
Therefore, we can assume that AMD stock has little chance to fluctuate its price over time & if it happens, they can split stock to reduce over price.
- Semiconductor industry trend
The graph shows a positive growth trend for the semiconductor industry over time. It started with a below $50 billion market & gradually reached more than $5,50 billion market at the end of 2023.
The maximum growth occurs in 2022, closer to $6,00 billion & projects the same growth in 2024. It is about a 30% rise in market share from 2020 to 2022.
The growth level was not always parallel. Perhaps the industry had faced supply chain disruptions and geopolitical tensions or grew slower in developed countries compared to developing countries.
For example, Asia (Taiwan) currently dominates the semiconductor market, but Europe and North America are just emerging as new markets. So, the Semiconductor industry has a good chance to grow its market in regions or subcontinent where they have zero market share.
Let’s see some surveys; what do studies say about the semiconductor industry?
A study conducted by Statista agrees that the semiconductor industry will grow in the long term.
McKinsey forecasted annual growth on average 6 to 8% up to 2030. They have forecasted a trillion-dollar industry by 2030.
Overall, the semiconductor industry has the potential to grow due to its increased demand, huge investment & government support. So, these all are positive signs for AMD stock to be a profitable investment.
- AMD stock competitors
| Market | Competitors | Market size (%) |
| CPU | AMD | 25 |
| Intel | 70 | |
| Qualcomm, ARM | 5 | |
| GPU | NVIDIA | 80 |
| AMD | 20 | |
| AI Accelerators | NVIDIA | 75 |
| Intel | 15 | |
| AMD | 10 | |
| Mobile Chipsets | Qualcomm | 40 |
| MediaTek | 30 | |
| Samsung | 20 | |
| Unisoc | 10 | |
| Huawei, HiSilicon | 5 | |
| AMD | 0 |
You can see from the AMD competitor table that AMD is a rising company in three segments: CPU, GPU & AI. It doesn’t seem that AMD can beat or become equal to Intel & NVIDIA. Intel has a long-term reputation for the CPU market where NVIDIA dominates GPU with 80% market. In the AI market, AMD has a chance to overcome Intel, but it is really hard to be equal with NVIDIA.
In the Mobile Chipsets, you will see a big fight between Qualcomm & MediaTek, but AMD has zero market. This fight doesn’t suggest that Mobile Chipsets has a negative industry trend or an easy-to-capture market.
It is also possible that AMD has taken some strategic plans to enter Mobile Chipsets in the upcoming time, but that doesn’t mean AMD can easily be equal to Unisoc or Samsung. But we can expect a market expansion of AMD which can increase stock price.
Moreover, if AMD keeps its fast & efficient product performance, then there is a good chance to grow the market & stock value at the present pace.
Overall, AMD is now in the growth stage & has much potential to be a profitable stock, but they have to go a long way to be the market leader.
- Semiconductor geopolitics
Geopolitical tension can negatively impact the semiconductor industry if there is any war or economic sanction. This sanction will disrupt the Supply Chain, restrict trade location, & increase raw material prices.
In short, AMD stock may face a huge price hike & instant fall.
But there also creates an opportunity for the company that works on specific semiconductor products.
Such as, if war occurs, then the defense budget will increase among rival countries. This spending will create a new micro market for military-grade ensemiconductors products.
Also, this new market will create a resource shortage for the commercial market to meet increased demand, which ultimately leads to price fluctuation.
Therefore, AMD must come up with a proper plan to survive during geopolitical tension.
Concluding Thought
AMD can be one of the leading stocks that can be a good competitor for Intel & NVIDIA. The fundamental analysis indicates potential growth, whereas industry analyses show medium growth stock. Analysts are bullish regarding AMD stock price, but past performance doesn’t assure a future profit.
There is no doubt that semiconductors will be one of the trending industries in the upcoming time but political instability could divert the market to a single location.
If AMD makes enough advance plans to take advantage of the geopolitical crisis, then AMD stock would be high performing stock in the upcoming day.
Frequently Asked Questions (FAQ)
Stock symbol for AMD?
Advanced Micro Devices traded stock on Nasdaq or other stock exchange platforms under the AMD symbol. This symbol is the short abbreviation of the company & by using it, you can easily identify stock performance & other important related information for stock investment. AMD went to initial public offering (IPO) on August 5, 1990, on the Nasdaq exchange.
Disclaimer
The information provided in this article is author’s view & only for educational purposes. Also, the intention of this article is not hurting any stock analyst. This is not a sponsor post & not an investment advice. Do your research before making any important financial decision. Therefore, FinanceIdeas.org will not be liable for your financial loss.
