In the world of investment, there are a few things as thrilling and captivating as an institutional investor purchasing a new position in a company like Advanced Micro Devices, Inc. (NASDAQ:AMD). And that’s exactly what happened during the fourth quarter of 2022 when Cyndeo Wealth Partners LLC bought 3,260 shares of AMD’s stock valued at approximately $211,000.
But who or what is Advanced Micro Devices? And why has it attracted the attention of an institutional investor like Cyndeo Wealth Partners LLC?
Well, for starters, AMD is a semiconductor manufacturer that operates through two main segments: Computing & Graphics, and Enterprise, Embedded and Semi-Custom. In the former segment, AMD provides desktop and notebook processors and chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs as well as development services.
On the other hand, its Enterprise, Embedded and Semi-Custom segment produces server/workstation products such as EPYC processors for enterprise markets; embedded and semi-custom SoC products which include solutions for gaming consoles; services related to aforementioned products such as engineering support and project management.
But how does this translate into financial performance? Well, in Q4 2022 (the same period when Cyndeo Wealth Partners LLC purchased their new position), AMD reported quarterly earnings results that were quite impressive. The semiconductor manufacturer beat analysts’ consensus estimates by $0.02 with $0.69 EPS while returning on equity (ROE) was estimated at 8.52% and net margin of 5.59%.
This performance was driven by revenue from both Computing & Graphics ($1.91 billion) which increased YoY by approximately 39% compared to 2021 which accounted for more than one third of overall revenue ($6.48 billion) during Q4 in addition to several major launches such as FidelityFX Super Resolution technology or Ryzen Threadripper PRO processers.
All of these factors, among others, have led research analysts to predict that Advanced Micro Devices, Inc. will post 2.4 EPS for the current year.
In conclusion, while semiconductor manufacturing may not be an industry that the average person thinks about every day, it is clear that companies like AMD have been able to attract significant attention from institutional investors based on their impressive financial performance and potential for future growth. Only time will tell how things play out for Advanced Micro Devices, but one thing is for certain – they are a company that deserves some attention in financial circles.
Investors and Analysts Bullish on AMD’s Growth Potential Despite Volatility
Advanced Micro Devices (AMD) has been the subject of intense investor interest, as several hedge funds and institutional investors have recently upped their stakes in the semiconductor provider. Vanguard Group Inc., BlackRock Inc., State Street Corp, Price T Rowe Associates Inc. MD, and Northern Trust Corp have all increased their holdings of AMD shares over the past few quarters.
Vanguard Group now owns over 134 million shares worth more than $8.5 billion, with BlackRock holding 117 million shares valued at over $7.4 billion. State Street controls roughly 66 million shares worth $4.2 billion, while Northern Trust’s stake has grown by more than 35% to stand at just over 17 million shares valued at around $1.9 billion.
In addition to this increased interest from large investors in AMD’s stock, the company has also been active in other areas of business. Its two operating segments include Computing & Graphics and Enterprise, Embedded and Semi-Custom, which offer desktop and notebook processors and chipsets, discrete and integrated graphics processing units, data center and professional GPUs as well as numerous development services.
Although AMD’s share price opened at $92.47 last Friday following a recent run-up in value – thanks to raised price targets from analysts – the company has had its ups-and-downs over the past year, with a one-year low of $54.57 and a one-year high of $109.57.
Despite this volatility in price action over the past twelve months or so, its market capitalization is now around $148.82 billion with a P/E ratio of over 105x earnings compared to leading industry peers such as Intel Corp that trades on less than half this value at around 20x earnings based on current market data records.
The company is making moves elsewhere too; insiders sold more than 79k company shares valued at around $6.8 million last quarter alone, while several equities research analysts have recently weighed in on AMD shares with assessments ranging from “strong buy” to “hold.” Barclays, Truist Financial, and Raymond James lifted their price targets on the stock to $90.00, $79.00, and $115.00 per share respectively.
The coming months will be telling for AMD as it navigates these challenges of changing leadership coupled with competitive pressures – including from industry rivals such as Nvidia – but its increased presence on the institutional investor landscape paired with positive analyst sentiment shows a belief that the company still has significant growth potential ahead of it.