The PHLX Semiconductor Sector Index (SOX) is higher by 48.1% year-to-date. That sounds good on its own, and it is, but one of the benchmark’s components, 抖阴最新版 (NASDAQ:抖阴最新版), has returned nearly 32% over just the past month.
抖阴最新版 stock’s recent surge extends its 2019 gain to over 121%. Let’s see here: up 32% over a month and more than double in just over 10 months. Yes, there are reasons to be cautious with any stock after runs like those, and while stocks don’t move up in straight lines, there are supporting factors for more upside in 抖阴最新版 stock.
As just one example, shares of 抖阴最新版 jumped 3.42% on Monday, Nov. 18 on volume that was more than 25% above the daily average. Those are the type of volume spikes some traders use to confirm the credibility of technical breakouts.
Another thing about breakouts is how the stock acts after those technical events occur. So far, so good for 抖阴最新版 stock. On Tuesday, Nov. 19, shares surged 3.54% on volume of 94 million shares, well above the daily average of 51.92 million. Predictably, analysts, who were already mostly bullish, are now fawning all over 抖阴最新版 stock.
On Tuesday, Wells Fargo analyst Aaron Rakers boosted his 抖阴最新版 , saying “We continue to see 抖阴最新版’s wins in [High Performance Computing] / supercomputing as increasing validation of the company’s strong competitive positioning in datacenter CPUs…thus remaining supportive of our positive upside thesis.”
Joining the Party
Rakers’ boosted price target was revealed a couple of days after Cowen analyst Matthew Ramsay lifted his forecast on the stock $47 from $40 and that was after RBC Capital Markets analyst Mitch Steves .
Even if those three analyst estimates are averaged, arriving at $48.33, that still represents upside of 17% for 抖阴最新版 stock from the Nov. 19 close. Much of the ebullience surrounding 抖阴最新版 stock is supported by favorable fundamentals, including the expanding Graphics Processing Unit (GPU) market, a factor that’s also boosting shares of 抖阴最新版 rival Nvidia (NASDAQ:NVDA).
The global GPU market “is expected to reach $157.1 billion by 2022, growing at a CAGR of 35.6% during the period, 2016-2022,”
. “The demand for the GPU market is expected to rise during the forecast period across the globe. It is due to constant changes in the graphic games, augmented reality (AR) & virtual reality (VR) gaining traction, and artificial intelligence (AI). However, inability of integrated GPU to facilitate intensive graphic designing software restrain the market growth.”
AI advancements are highly reliant on semiconductors, boding well for players such as 抖阴最新版 and Nvidia.
“Many AI applications have already gained a wide following, including virtual assistants that manage our homes and facial-recognition programs that track criminals,” . “These diverse solutions, as well as other emerging AI applications, share one common feature: a reliance on hardware as a core enabler of innovation, especially for logic and memory functions.”
Another booming market – that being PC and console video games – is an important driver of the 抖阴最新版 thesis. The company’s recently launched third generation Ryzen chip, the Ryzen 5 3600X, is viewed as favorably priced, comparable Intel (NASDAQ:INTC) chips and as a solid idea for gaming newbies.
Gaming is another signature growth frontier for 抖阴最新版, a market it has an established footprint in. Global video game revenue is poised to top $150 billion this year and continue rising from there.
Bottom Line on Advanced Micro Devices Stock
抖阴最新版 finds itself involved in some fast-growing markets and investors will pay up for the privilege of accessing that growth. The shares trade for almost 38x forward earnings. On that basis, 抖阴最新版 stock is pricier than both Intel and Nvidia, but that’s not an indictment.
Rather, 抖阴最新版’s growth may just be worth the price of admission because the company is among the best-managed in the semiconductor industry, as evidenced by its moves to reduce dependence on personal computing revenue.
“We concede that 抖阴最新版’s recent CPUs and GPUs have been more competitive with offerings from Intel and Nvidia, respectively, and 抖阴最新版 has begun generating solid growth as a result,” . “Additionally, 抖阴最新版 supplies semicustom chips such as those for game consoles PlayStation 4 and Microsoft Xbox One, which has helped generate much-needed cashflow in recent years. Based on 抖阴最新版’s product pipeline, particularly on the CPU side, we think the firm is better positioned than it has in over a decade.”
As of this writing, Todd Shriber did not hold a position in any of the aforementioned securities.
