Should You Invest in AMD?

PHOTO CREDIT: AMD

OVERVIEW

Why You Should?

  1. One of the sectors that AMD has performed exceptionally well in is the data center. Data centers power companies around the world. In these locations, powerful GPUs (like the ones that AMD sells) are used for cloud computing, cloud storage, and other cloud-based services. This sector of the company’s business will continue to grow as companies modernize their operations.
  2. The COVID-19 pandemic further increased the growth of the company. As people stayed indoors, the demand for the company’s GPUs for gaming consoles and computers soared. In addition to this, more companies modernized their operations due to the work-from-home environment, supercharging the growth for the data centers. This benefited the company.
  3. Semiconductor companies, like AMD, continue to acquire new companies to improve and grow their product offerings. The company recently acquired Xilinx, a company that manufactures programable logic boards and system-on-chips. The company will continue to make acquisitions to grow its business and benefit investors.
  4. The company has seen rising revenues and profits over the past couple of financial years due to the reasons mentioned above. This has benefited the company as they have been able to grow and expand the business. This has also benefited investors in the company. In the financial year of 2020, the company reported revenues of around 9.76 billion and profits of around 2.49 billion. Both of these metrics are higher than what the company reported in the financial year of 2019 when they had revenues of around 6.73 billion and profits of around 341 million.
PHOTO CREDIT: Yahoo Finance

Why You Should Not?

  1. The COVID-19 pandemic has also hurt the company, especially with supply chain issues. With the sky-high demand for chips during the pandemic, the company was plagued with chips and other material shortages. This meant that the company could not capitalize on all of the demand due to these issues. This also caused an increase of costs for the company.

MY OPINION

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Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.

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Aaditya Patel

Aaditya Patel is a writer who publishes analysis on companies publicly traded on the NYSE. Follow him @the_investing787 on Instagram for summary posts.