Company Research | Advanced Micro Devices

January 4, 2024by Anton Tryhubchenko

Today, let’s talk about Advanced Micro Devices, whose shares are among the top three growth leaders over the past 3 months.

During this period, AMD shares increased by +43%. At the same time, the technology sector, to which the company belongs, increased by +17%, and the S&P 500 index by +10%. As you can see, Advanced Micro Devices shares show better returns than the sector average.

Advanced Micro Devices is one of the largest players in the global semiconductor market. The company has gone from being a supplier of chips developed by Intel to their direct competitor. Today, AMD develops its own GPUs, video cards, and server hardware, and is gradually entering the video game, data center, and artificial intelligence markets.

The company operates in the semiconductor industry. It was founded in 1969. 1983 it was listed on the NASDAQ, and in 2017 it was included in the S&P 500 index. For the past 9 years, the company has been led by Lisa Su and a team of experienced managers.

The main competitors of Advanced Micro Devices are Nvidia, Broadcom, and Intel. As you can see from the table above, some of them are ahead of AMD in terms of capitalization, but the company has several competitive advantages.

The company’s advantages are based on its being at the forefront of developing innovative architectures for processors. For example, in March 2017, AMD introduced Ryzen processors based on the Zen architecture. As they demonstrated significant efficiency improvements not only compared to their designs but also competitors, this breakthrough allowed them to challenge Intel’s long-term dominance in this niche. As a result, over the past 7 years, Intel’s share of the computer processor market has declined from 82% to 65%, while AMD’s share has grown from 18% to 35%.

Advanced Micro Devices published its latest report on October 31. 53% of the revenue structure is accounted for by manufacturing costs and 47% by gross revenue. Over the past quarter, the company made a profit of $299M. And its market capitalization is now $243B.
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