Nasdaq AMD

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Why Are Investors Eyeing These Semiconductor Stocks Right Now?Semiconductor stocks performed extremely well last year in the stock market, and analysts are expecting more great things in the space in 2021. And the reason is quite simple. While it’s no secret that semiconduc

Last year, the semiconductor industry saw strong demand for semiconductors as people working and studying remotely led to rising demand for laptops, PCs, and gaming consoles. According to an EET Asia report from earlier this month, citing data from International Data Corp. (IDC), semiconductor revenues rose 10.8% year-on-year on a global basis to $464 billion in 2020.

According to IDC, the semiconductor market is expected to grow 12.5% year-over-year to $522 billion in 2021, fuelled by rising demand for semiconductors used in 5G, automotive, computing, and consumer applications.

Using the TipRanks Stock Comparison tool, let us compare two chip companies, Nvidia and Advanced Micro Devices, and see how Wall Street analysts feel about these stocks.

Nvidia (NVDA)

Nvidia’s products include graphics processing units (GPUs) and data center platforms and systems. The company reported its earnings on May 26 with adjusted earnings of $3.66 per share in Q1 FY22, a jump of 103% on a year-over-year basis, topping the Street’s estimates of $3.28 per share. Revenues popped 84% year-over-year to $5.66 billion in the first quarter beating analysts’ expectations of $5.41 billion.

NVDA’s data center, gaming, and professional visualization platforms recorded a year-over-year jump of 79%, 106%, and 21%, respectively.

Nvidia anticipates revenues of around $6.3 billion in the second quarter of FY22. The company continues to expect its gaming and data center platforms to continue to register a quarter-on-quarter revenue growth in the second quarter.

The company’s GeForce RTX 30 Series GPUs have been incredibly popular and in strong demand. NVDA commented on the GeForce RTX 30 Series GPUs at its earnings call, “Channel inventories are still leading and we expect to remain supply constrained into the second half of the year.”

In the first quarter, Nvidia introduced cryptocurrency mining processors (CMP) that earned revenues of $155 million in Q1. In the second quarter, the company anticipates revenues from CMPs to be $400 million.

Nvidia foresees a significant opportunity to earn revenues from the Omniverse Enterprise platform, a technology platform that enables 3D design teams to work together in real-time on a global basis. The company stated at its earnings call that over 400 companies are in the process of evaluating Omniverse and around 17,000 users have downloaded the open beta platform.

The company has also benefited greatly from its acquisition of Mellanox Technologies. NVDA completed the acquisition in April last year and paid $7 billion for the company.

NVIDIA CEO Jensen Huang said about the acquisition, “Mellanox, one year in, has exceeded our expectations and transformed NVIDIA into a data-center-scale computing company.”

In April this year, the company unveiled an artificial intelligence (AI) enabled processor, NVIDIA DRIVE Atlan, for autonomous vehicles and is targeting automaker’s autonomous vehicle models in 2025.

The company has also announced its first data center CPU, NVIDIA Grace, its first Arm-based processor CPU that is expected to be available in early 2023. Nvidia said at its earnings call that the US Department of Energy's Los Alamos National Laboratory and the Swiss National Supercomputing Center had already announced plans to build supercomputers powered by the Grace data center CPU.

Nvidia’s proposed $40 billion acquisition of Cambridge-based Arm has come under scrutiny by the UK Government. In April this year, the UK Secretary of State had issued an intervention notice on behalf of the UK Government citing national security interests.

However, Nvidia’s EVP and CFO, Colette Kress said on the Q1 earnings call, “On our Arm acquisition, we are making steady progress in working with the regulators across key regions. We remain on track to close the transaction within our original timeframe of early 2022…NVIDIA is uniquely positioned to enhance Arm's capabilities, and we are committed to invest in developing the Arm's ecosystem, enhancing R&D, adding IP and turbocharging its development to grow into new markets in the data center, IoT and embedded devices; areas where it only has a light footprint, or in some cases, none at all.”

On May 24, Nvidia’s board declared a 4:1 stock split in the form of a stock dividend to make its shares more accessible to a larger number of employees and investors. The proposed split will increase the company’s outstanding common shares to 4 billion. However, the split is conditional on shareholders’ approval at NVDA’s annual meeting to be held on June 3.  (See Nvidia stock analysis on TipRanks)

Following the earnings, Rosenblatt Securities analyst Hans Mosesmann reiterated a Buy and a price target of $800 on the stock. Mosesmann commented on the earnings in a note to investors, “Excellent earnings and guide last night as Nvidia hit record sales in its strategic market segments with growth to continue through the fiscal year. Management is navigating the supply chain constraints endemic in the industry and sees supply improving gradually as the year progresses.”

“In terms of the Crypto factor that has unnerved investors on the risk of a big inventory correction, we applaud management’s move to Crypto Mining Processors (CMPs) that are unusable for gaming, and effective castration of new RTX 30 series for Ethereum mining (hash rates cut in half), which point to a much more benign Crypto cycle this go-around…The ARM play, which looks like a toss-up to us, will work regardless. NVDA remains for us as the best must-own secular AI semiconductor/IP play,” Mosesmann added.

Consensus among analysts on Wall Street is a Strong Buy based on 25 Buys and 1 Hold. The average analyst price target of $728 implies 17.5% upside potential to current levels.

Advanced Micro Devices (AMD)

Advanced Micro Devices is a semiconductor company whose products include graphics processing units (GPUs), semi-custom System-on-Chip (SOC) products and chipsets, x86 microprocessors (CPUs), and accelerated processing units that integrate microprocessors and graphics (APUs).

Last month, AMD reported its first-quarter results with revenues of $3.4 billion, a jump of 93% year-on-year. This revenue growth was driven by a whopping 286% jump in Enterprise, Embedded and Semi-Custom revenues from higher sales of semi-custom SOC chipsets and EPYC server processors. The company reported non-GAAP earnings of $0.52 per share, up 189% year-on-year.

The company’s Ryzen Mobile 500 Series processors for laptops that were introduced in January are doing exceedingly well and AMD expects sales of these processors to continue to grow this year. The number of laptops powered by these processors is expected to increase by 50% compared to AMD’s earlier generation of processors.

AMD expects a significant rise in sales of its Radeon 6000 Series GPU in the coming quarters as the company ramps up production of these GPUs.

When it comes to data center GPUs, revenues are expected to rise in the second half of this year as the company increases the production of the AMD Instinct GPU to “support multiple HPC wins including Frontier, the first U.S. exascale supercomputer.”

As demand for Microsoft's (MSFT) and Sony Group’s (SNY) gaming consoles go up, AMD expects sales of its semi-custom products to remain high throughout the year.

In the second quarter of FY21, AMD has forecast revenues of approximately $3.6 billion. It expects data center and gaming products to drive this 86% year-over-year growth in revenues. AMD anticipates non-GAAP gross margin to be around 47% in Q2.

For FY21, the company expects revenues to grow 50% year-over-year driven by growth across all its businesses.

AMD’s President and CEO, Lisa Su stated at the earnings call, “We expect the number of AMD-powered instances to double by the end of the year to 400 as Microsoft Azure, Amazon, Google, IBM, Oracle, and Tencent significantly expand their offerings with third-gen EPYC processors. For the enterprise, Cisco, Dell, HP Enterprise, Lenovo, and Supermicro all announced plans to expand their AMD-based offerings with more than 100 new third-gen EPYC processor-powered server platforms that deliver superior performance and total cost of ownership.”

Su added, “2021 marks an inflection point in terms of the scale, ecosystem support, and customer adoption of our EPYC and instant processors.”

The company is also on track to close its acquisition of Xilinx (XLNX) by the end of this year. In October last year, AMD announced the acquisition of Xilinx valued at $35 billion. Xilinx is a developer of highly flexible adaptive processing platforms.  

On May 19, the company announced that it will buy back stock worth $4 billion. AMD intends to fund the share repurchase through cash generated from operations. (See Advanced Micro Devices stock analysis on TipRanks)

On May 24, Northland Capital Markets analyst Gus Richard reiterated a Buy and a price target of $116 on the stock. Richard said in a research note to investors that the company is likely to be 30% Intel’s (INTC) size by next year and will likely exceed Intel’s gross margins in 2023.

Richard stated, “AMD’s market share gains are likely to continue in 2H:21 and CY22 driven by corporate client and server. The acquisition of XLNX will significantly broaden AMD's IP portfolio and broaden its exposure to comms, industrial and automotive markets. We believe leadership in the x86 market is driven primarily by process technology and to a lesser extent design differentiation.”

Consensus among analysts on Wall Street is a Moderate Buy based on 10 Buys, 7 Holds, and 1 Sell. The average analyst price target of $105.40 implies 34.4% upside potential to current levels.

Bottom Line

AMD is giving Nvidia a run for its money when it comes to demand for its GPUs and data center processing platforms. However, Nvidia seems to be targeting new industries like the cryptocurrency mining and automotive industry with its CMP processors and its AI-enabled NVIDIA DRIVE Atlan processors.

While analysts are bullish about NVDA, based on the upside potential over the next 12 months, AMD seems to be a better buy.

Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in BioCryst Pharmaceuticals Inc (Symbol: BCRX), where a total of 21,376 contracts have traded so far, representing approximately 2.1 million underlying shares. That amount

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Investors are on the lookout for long term investment opportunities in online betting and gaming, a massively growing industry. However, identifying the best players in the industry and the inherent risks associated with uncertain growth can be daunting. In a recent article, I su

It is not uncommon to see companies perform well in the years after insiders buy shares. The flip side of that is that there are more than a few examples of insiders dumping stock prior to a period of weak performance. So before you buy or sell Advanced Micro Devices, Inc. (NA

Looking at the underlying holdings of the ETFs in our coverage universe at ETF Channel, we have compared the trading price of each holding against the average analyst 12-month forward target price, and computed the weighted average implied analyst target price for the ETF itsel

There's no question that semiconductor giant Intel (NASDAQ: INTC) is struggling. The company has made misstep after misstep on the manufacturing side of its business, squandering its lead to third-party foundries and opening the door for rival AMD to catch up. AMD is now competit

Bitcoin prices have plummeted from levels of around $62,000 in mid-April to just about $35,000 as of Sunday. The sell-off is driven by factors including Tesla’s decision to not accept the digital currency as payment for its cars and China’s move to ban financial insti

Advanced Micro Devices (AMD) has gone from strength to strength in recent years. While the company has become a giant in the semiconductor industry, it has also been incrementally eating away at its traditionally much bigger rival Intel’s dominance.

The wide gap has begun to close between the two companies and Northland analyst Gus Richard thinks it is about to get narrower still.

“We expect by CY22 AMD will be 30% the size of INTC, up from 9.2% in CY18,” the 5-star analyst said. “We expect the delta between INTC and AMD GM will decrease by 13.1% during this period. Also, we estimate that AMD's GM to exceed INTC's in CY23. AMD’s market share gains are likely to continue in 2H:21 and CY22 driven by corporate client and server.”

Richard expects AMD will have a “strong” Q2, but the analyst also points out that as the economy reopens, it is very likely the outsized demand for PCs seen during the pandemic era will fade.

So, bad news for AMD, right? Not necessarily. Simply put, Richard thinks AMD’s recent products are better than Intel’s, and due to its competitor’s missteps, AMD has been making inroads with a hard-to-crack client base – corporate customers.

Intel’s 14nm and 10nm shortages gave AMD a way into the corporate market, which the company can now build on.

“We estimate that AMD currently has a 5% to 7% share of the higher-margin corporate client market and expect its share to accelerate as corporations dual source,” the analyst noted.

There is also increasing evidence, says Richard, that Intel is more focused on “low-end” Chromebooks, which bodes well for “a strong 2H for AMD in the client market.”

While Richard thinks AMD’s revenue share in PC clients amounts to approximately 20% right now, over the next couple of years, he expects it to get closer to 50%.

Further bolstering the case for AMD is the anticipated closing of the Xilinx deal, which Richard believes will “significantly broaden AMD's IP portfolio and broaden its exposure to comms, industrial and automotive markets.”

So, all good news for AMD but what are the implications for investors? Richard reiterated an Outperform (i.e., Buy) rating on the shares and keeps the $116 price target intact. Investors could be sitting on gains of 49%, should the analyst’s thesis play out in the year ahead. (To watch Richard’s track record, click here)

Not all of Wall Street’s analyst corps are currently behind AMD but enough to merit a Moderate Buy consensus rating. This is based on 10 Buys, 7 Holds and 1 Sell issued over the past 3 months. The average price target clocks in at $105.40, implying shares will be changing hands for ~35% premium in one year’s time. (See AMD stock analysis on TipRanks)

To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the Daily Semiconductor Bull 3X Shares (Symbol: SOXL) where we have detected an approximate $89.5 million dollar outflow -- that's a 1.8% decrease week

Oracle Corp on Tuesday launched a cloud computing service powered by data center chips from Ampere Computing based on technology from Arm Ltd, the second major cloud company to offer an Arm-based service after Amazon.com's Amazon Web Services.

Many growth stocks have underperformed the market in recent months as fears of inflation have sparked a rotation toward cheaper dividend-paying stocks. However, investors shouldn't blindly buy all high-yielding stocks trading at low multiples.

InvestingFind bargain-priced stocks in a pricey marketSince the bottom of last year’s pandemic-led bear market, the S&P 500 index has nearly doubled, posting record after record along the way. The S&P 500 trades at roughly 22 times projected earnings for the next fo

Recent retirees should ignore all the noise about cryptocurrencies, NFTs, SPACs, and other speculative investments. Some of these investments might generate big short-term gains, but they're far too volatile for older investors who want to prioritize capital preservation and stab

Advanced Micro Devices (AMD) hasn't had a great year, with shares falling 16% since the start of 2021. Should investors be worried about this underwhelming showing? Not according to the semiconductor giant. In fact, going by the company’s latest actions, quite the opposite.

On Wednesday, AMD announced an unprecedented share-repurchase program. Over an unspecified period, the company will buy back $4 billion’s worth of stock - funded in its entirety by cash generated from operations.

And the company is sitting on plenty of it by now. The company saw out 2020 with $2.29 billion of cash in the coffers and short-term investments, the most it has had since 2009.

What’s more, AMD generated free cash flow (FCF) of $777 million in 2020, far above the $276 million the company produced in 2019. Prior to that, since 2011, the company hadn’t reported positive cash flow for a fiscal year.

Looking ahead, Deutsche Bank’s Ross Seymore excepts AMD to generate ~$3-3.5 billion in annual FCF from 2021 to 2023. Over that 3yr period, the $4 billion repurchase plan should represent ~40% of FCF. Seymore also notes that this first large return of cash to shareholders indicates AMD’s “confidence in its ability to continue generating solid free cash flow (FCF) for the foreseeable future.”

“Overall,” the 5-star analyst further said, “We expect the market to view this share repurchase announcement favorably as it illustrates AMD’s confidence in its future prospects despite recently rising investor concerns regarding intensifying competition.”

Mirroring AMD’s confidence, Wells Fargo’s Aaron Rakers thinks the aforementioned intensifying competition is less of a concern to AMD and believes the announcement “likely reflects AMD's confidence on executing on its technology roadmap, as well as it maintains/improves its competitive positioning vs. Intel.”

What does the rest of the Street make of AMD’s prospects? The ratings are a mixed bag, tilting in the bulls’ favor. Based on 9 Buys vs. 7 Holds and 1 Sell, the stock has a Moderate Buy consensus rating. The average price target is more conclusive; at $106.14, the shares are anticipated to appreciate by 37% over the coming months. (See AMD stock analysis on TipRanks)

To find good ideas for tech stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

In spite of a global chip shortage and soaring sales, Advanced Micro Devices' (NASDAQ: AMD) stock price has declined by over 21% from all-time highs registered in mid-January. The tech stock sell-off has taken a bite out of this fast-growing semiconductor name, and even a stellar