Advanced Micro Devices stock has an average 30-day price performance (NASDAQ:) of -6.86%. AMD is still my favorite stock.

Now, we have a lower buy-in window. AMD’s stock is trading at a 16.36% discount from its 52-week high of $122.49. (See Advanced Micro Devices stock charts on TipRanks) 

AMD, a semiconductor company that supplies x86 processors for consumer and datacenter use, is also a distributor. Radeon graphics processing unit are also available. AMD holds a license to build custom ARM-based CPUs.

Market share increases against Intel (NASDAQ

Google’s (GOOGL) decision to use more EPYC processors is boosting AMD’s rising market share in server processors. AMD has a 11.6% share of x86 processor revenue in Q2 2021.

AMD’s server processor market share in Q2 2020 was only 5.8%. Now, it is 9.5%. Intel (INTC), a leader in server processor development, is now lowering the cost of their products.

Google (NASDAQ:)’s increase use of EPYC processors could boost AMD’s TTM net income of $3.436 billion. According to a recent leak, AMD charges $10,000 for Milan X EPYC processors.

Google Cloud ranks third in the cloud infrastructure market, which is worth $47 billion per quarter. Google Cloud could be beaten by rivals that buy AMD EPYC processing units. Amazon (NASDAQ): The No. Amazon (NASDAQ:), the No. 1 cloud infrastructure provider, rents AWS Instances which use EPYC processors.

Windows 11 Catalyst

Aside from its server gains, AMD’s Ryzen brand helped it achieve 17.1% market share in x86 desktop processors, and 20% in laptop processors. AMD therefore has a catalyst from Windows 11’s TPM 2.0 hardware security requirement.

There’s a long list of Ryzen, Threadripper, and EPYC processors that are Windows 11-compatible. At the same time, there’s a worsening short supply of processors. All available Ryzen processors compatible with Windows 11 will fetch the most expensive prices from top PC manufacturers such as HP, Inc., Dell, and Lenovo.

AMD’s profit margin is 25.80%, which is an already impressive figure. Due to a shortage in x86 processors, this profit margin could grow.

Windows 11 will increase sales of Radeon RX discrete and integrated graphics accelerator cards. Windows 11 is likely to force Gamers to get new PCs.

Nvidia (NASDAQ;) still has not produced enough GeForce GTX-Distributed GPUs. Nevertheless, it is not reported in any news articles that AMD can’t produce enough Radeon graphics processors.

AMD: Cheaper Valuation Ratios

AMD’s stock is now more affordable than NVDA’s. AMD has a TTM P/E valuation of just 36.27.  This is half that of NVDA’s 74.20. NVDA doesn’t sell x86 processors; it only offers GPUs and ARM processors.

(Source: Motek Moyen)

Moreover, AMD’s Piotroski F score is 8, signaling that it is very strong financially and presents excellent value. Nvidia’s Piotroski score is only 5 and Intel’s is 6.

AMD’s total cash position is also $3.79 Billion. This is greater than this company’s total debt of $657 million.

Wall Street’s Take 

The consensus among Wall Street analysts is that AMD is a Moderate Buy, based on 11 Buys, 3 Holds, and 1 Sell rating. The average AMD p­­rice target is $116.21, implying 13.43% upside potential.

Conclusion 

It is a great investment option for investors due to its increasing market share in x86 data center and consumer processors.

Disclosure: Motek Moyen had no position at the time this article was published.

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