Advanced Micro Devices, Inc. (AMD) saw impressive growth in recent months, significantly outperforming the S&P 500. Advanced Micro Devices’ stock rose by approximately 153.7% compared to the S&P’s gain of about 39.7% over the past 2-years. Hedge funds were buying shares, and the company was added to the WhaleWisdom Index on February 15, 2022.
Advanced Micro Devices is an American-based company specializing in manufacturing semiconductor devices used in computer processing. The company is well known for its graphics processing units, motherboard chipsets, and data centers. AMD saw product demand growth during the coronavirus pandemic as many consumers sought out additional electronics for remote work, online education, and home entertainment. AMD debuted new mobile processors and graphics processors at a January CSE trade show with a focus on improved technology for notebook personal computers and gaming applications. AMD also recently acquired Xilinx, another technology and semiconductor company, intending to expand its presence in the data center market through Xilinx’s specialty chips.
Mixed Results in Fourth Quarter
Advanced Micro Devices saw mixed results in the fourth quarter and the aggregate 13F shares held by hedge funds decreased to about 158.5 million from 159.9 million, a mild decrease of approximately 0.9%. Of the hedge funds, 50 created new positions, 102 added to existing holdings, 28 exited, and 106 reduced their holdings. In contrast to hedge funds, institutions were buying. Overall, institutions increased their aggregate holdings by about 0.7%, to approximately 821.0 million from 815.6 million.
Favorable Estimates
Analysts estimate that year-over-year increases will bring earnings to $4.70 per share by December 2023, up from December 2022’s predicted $4.00 in earnings. Revenue estimates are also favorable at about $25.3 billion by December 2022 and approximately $29.0 billion by December 2023. The 13F metrics through 2021 show a rising trend in Advanced Micro Devices holdings along with its stock price.
Analysts Share Optimism
Analysts appear optimistic about Advanced Micro Devices’ future potential as the company repurchases shares and continues to expand its product portfolio. Advanced Micro Devices is reaping the rewards of a strong graphics chip market and gaming popularity. The company received a Buy rating from Bank of America analyst Vivek Arya. Analyst Stacy Rasgon of Bernstein & Co. put a $150 price target on the stock and raised his firm’s rating to Outperform. Rasgon noted that AMD continues to gain market share in areas such as client, server, graphics, and gaming consoles.
Bright Outlook
Advanced Micro Devices has seen some fluctuation in stock price over the past year, along with many other technology companies. However, the semiconductor company continues to gain ground in the industry. AMD’s year-to-date growth is very encouraging for investors, and future estimates speak to the stock’s potential for future growth.