Is Advanced Micro Devices, Inc. Stock A Buy Ahead Of Ryzen Launch?

Shares of AMD have gained 582% in the last one year. With AMD stock trading near its 10 year high, is it a buy ahead of the Ryzen Launch?

Is Advanced Micro Devices Inc. (AMD) Stock A Buy Ahead Of Ryzen Launch


Sunnyvale, California-based Advanced Micro Devices, Inc. (NASDAQ:AMD) has found a constant mention in the recent news. The hype has been constantly rising heading into the upcoming launch of the company's Ryzen CPUs. With less than a week to go before the latest CPU range starts shipping to customers, the big question is whether or not AMD stock is a good buy near its 10-year highs? The question assumes even greater relevance given the 580%+ rise in AMD stock price in the last 12 months. So, Is AMD stock still a good buy? Well, we think yes, and, here are 3 reasons to buy the stock even at the current levels.

AMD is set to gain CPU market share.

One of the biggest reasons to buy AMD stock ahead of the Ryzen launch is the potential for market share gains across the PC market as well as the server market. As per CPU Benchmark, AMD's share of the current PC CPU market is at 17.4% in Q1 2017 (as of Feb 27), which is down from a peak of 48.4% market share in Q1 2006. As pointed out by an author, Chris Lau, on Seeking Alpha, we could see AMD take market share from Intel by the end of this year. Given the historical speed at which market share changes in the CPU market, AMD's share of the CPU market climbing up to 20% in 2017 isn't a far fetched idea.

Ryzen Could Help AMD Break Intel's Near Monopoly In Servers.

The biggest gains from AMD's latest CPU product range could, in fact, come from market share gains in the server market. Why? Well, Intel has successfully kept AMD out of this market with a near 100% market share. As reported by Tiernan Ray from Barrons, the leading data center players will not be too happy in dealing with a monopolistic player to power their needs. Citing a recent bullish note from Rosenblatt Securities‘s Hans Mosesmann, the post states that "AMD’s new Zen family of processors (architected by highly acclaimed CPU ar- chitect Jim Keller), is set to gain share in mid-to-high end server sockets as datacenter players are keen on an alternative source that likely will not sell them “up” every year, and with features that Intel may not offer such as 8 memory channels (DRAM)."

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Disclosure: Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a ...

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