Just some time ago, Advanced Micro Devices (NASDAQ: AMD) was trading close to penny-stock. Now, its stock trades close to $94 EPS. Let’s look at how the company transformed and how it will do in the next five years.
Where Was NASDAQ: AMD Five Years Ago?
No one would have anticipated the immense growth Advanced Micro Devices (NASDAQ: AMD) has experienced in just five years. The company’s PC was declining and its stock hardly remained above $2 EPS. None of the stock market analysts saw any reason for NASDAQ: AMD to survive.
Things change in the year 2014. The company’s new CEO Lisa Su led the company ahead to a great comeback. She diversified Advanced Micro Devices From just PC equipment to add virtual reality products, gaining console chips, and data centers. The new additions are now the driving revenue collectors for NASDAQ: AMD.
Now, Advanced Micro Devices is directly competing with giants like Nvidia.
Another factor that NASDAQ: AMD made profits from us archiving Intel. Consequently, Advanced Micro Devices now market 7-nanometer chips. As of now, Intel has had a hard time flooding the market with such chips. And, this delay has helped NASDAQ: AMD stock grow.
Why Are Stock Market Analysts Positive About Advanced Micro Devices Future?
While a 50 percent increase seems unlikely, Stock market analysts believe that NASDAQ: AMD will continue to see similar gains.
The company’s stock has a PE ratio of 50. Although the numbers are already pretty high, stock market analysts anticipate around 70 percent increase for this year’s earnings. They also say that Advanced Micro Devices will see 50 percent growth next year.
One factor that has boosted NASDAQ: AMD stocks at the moment is Sony and Microsoft’s new gaming console release. Moreover, the company has also focused on Central Processing Units and Graphics Processing Units, which will be another major factor in boosting Advanced Micro Devices Stock.
What Are The Challenges?
Even though stock market analysts are pretty positive about NASDAQ: AMD stocks, there are some challenges that the company could face.
Nvidia is fighting tooth and nail to secure its position. Moreover, it has even regained a couple of investors that it had lost to Advanced Micro Devices.
Another competition is Intel. Intel brought in $19.7 billion in revenue in the last quarter. Meanwhile, NASDAQ: AMD brought in around $1.9 million. It’s clear that AMD is competing with giants that can afford to fight long battles.
To complicate things further, Advanced Micro Devices imports chips from Taiwan Semiconductor. What’s reassuring is that Intel has outsourced chips production as well.
Stock market analysts worry that NASDAQ: AMD’s dependence over outsourcing could become an issue while competing with other giants.