I’m sure that a lot of people would agree with the term “storm” to describe the year we’ve seen in 2020 and we still have 65 days left.
But, for investors that have been keeping their eyes open, this year could have been an opportunity to lock in massive gains.
Stores like Dollar General, Tractor Supply and grocery stores needed to keep up with the demand on shelves…and investors saw profits.
Technology companies such as Zoom saw the same market run-up as investors skipped happily to the bank.
Many of the technology trends that we’ve seen happening over the past 10 years were all of a sudden accelerated.
Companies were thrown into revamping systems so their employees could work from home. Educational institutions needed to figure out the same thing.
And one particular semiconductor company had a perfect storm lining up.
2019 was an integral year for Advanced Micro Devices (NASDAQ: AMD).
Last year, it finally beat rivals to market with new industry-leading 7-nanometer chipsets.
Fast forward a few months and all of a sudden there was a demand for new laptops and gaming at the point when AMD is at the best in its 50-year history.
This morning, AMD announced its third-quarter earnings and record revenue of $2.8 billion.
That’s up 56% compared to the same quarter of the previous year and up 45% when compared to the second quarter of 2020.
Dr. Lisa Su, president, and CEO said “We reported our fourth straight quarter with greater than 25 percent year-over-year revenue growth, highlighting our significant customer momentum."
"We are well-positioned to continue delivering best-in-class growth as we further extend our leadership product portfolio with the launches of our next-generation Ryzen, Radeon, and EPYC processors.”
Part of that demand is of course computers for those working and learning from home and gamers trying to fill their days.
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But the real highlight is the enterprise, embedded, and semi-custom segment. Revenue was up 116% year-over-year and 101% quarter-over-quarter.
Data centers are cash cows right now in the changing technology environment and rapid expansion of big data.
And they will continue to harness AMD EPYC processors to grow and expand for cloud computing, high-performance computing, and more.
The EPYC processors are being used by the Microsoft Azure Data Explorer.
Oracle announced plans to offer cloud instanced based on these processors.
Plus, many other big names are using AMD processors.
HP and Lenovo are still launching new AMD powered notebooks, desktops, and Chromebooks.
Apple announced the availability of the new AMD Radeon Pro 5000 series GPUS for the updated 17-inch iMac.
Both the PlayStation 5 and the Xbox Series X will be sporting AMD processors when they release in November.
Investors are seeing the benefits as well.
Shares are up 151% over the past year and 3,620% over the past five years. And that growth isn’t going to slow down anytime soon.
The management said it expects revenue for the fourth quarter to be approximately $3 billion which would be an increase of 41 percent compared to the same quarter last year.
Plus, on top of this morning’s earning release, AMD also announced that it would purchase rival company Xilinx for approximately $143 per share or a total of $35 billion.
Xilinx is the number one provider of adaptive computer solutions.
It’s the inventor of the field-programmable gate array (FPGA), programmable system-on-chips (SoCs), and the adaptive compute acceleration platform.
In layman’s terms, products that are used across data centers, communications, aerospace, and other industrial applications.
The company exceeded $3 billion in annual revenues last year, and will be a perfect addition to AMD as it continues to expand its reach in data centers and beyond.
The transaction is currently expected to close by the end of next year and will surely add to AMD right off the bat.
But, as I mentioned above, the company already has so many things going for it, you won’t have to wait until next year to see an investment in AMD pay off.
To your prosperity and health,
Joshua M. Belanger
Executive Publisher & Founder