Will Shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) Continue The Dizzying Run In 2017?
Shares of Sunnyvale, California-based Advanced Micro Devices, Inc. (NASDAQ:AMD) delivered blockbuster returns in 2016. AMD stock nearly quadrupled in value over the year, going from under $3 at the start of the year to close the year above $11, recording a yearly gain of nearly 290%. After an exhilarating run, investors could be tempted to book profits here, but is now the right time to book AMD profits? What does 2017 hold for the company? I believe the company is on the verge of multiple high potential opportunities which could drive another solid year for AMD stock and its investors.
AMD’s Strategy Is Finally Coming Together
The CPU and GPU business have come together at the same time for AMD. The recently released Ryzen CPUs and Radeon Instinct GPUs have been the best out of the AMD stable, in as far back as memory goes. The focus on machine learning could also provide AMD with new revenue streams from the data center (CPU as well as GPU) as well as the autonomous driving markets. These markets have, so far, been ruled by NVIDIA Corporation (NASDAQ:NVDA) (for GPUs) and Intel Corporation (NASDAQ:INTC) (for CPUs). Intel has seen its data center group report nearly 7% YoY growth in FY 2016, with Q316 revenue registering a 10% YoY jump. On the GPGPU side, NVIDIA Corporation (NASDAQ:NVDA) has seen its data center revenue accelerate by 121% YoY through the first 3 quarters of FY 2017 (ending in Jan 2017) while seeing its autonomous car revenue climbing by 58% YoY. In comparison, AMDs ‘Enterprise, embedded and semi-custom segment’ which includes revenue from server processors (AMDs limited exposure to the data center market), is up by 5.95% YoY (first 3 quarters of 2016).
The launch of the company’s latest products will hopefully help the company leverage the rapid growth in the data center as well as AI markets (GPGPU demand). The recently launched Ryzen CPUs have done more than enough to impress early reviewers. The fact that AMD’s zen architecture was built with a focus on heterogeneous computing, the Ryzen CPUs should benefit from future AI growth (which requires heterogeneous computing) while leveraging the computing power of Radeon Instinct, AMDs GPUs targeted at AI/machine intelligence. Every market where HPC is a need, AMDs Radeon Instinct can now compete with NVIDIA’s Titan cards. Hence, a small share of the growing data center and AI markets could mean multiple new revenue streams for AMD. (See also: Deep Learning To Drive Huge Growth For Advanced Micro Devices Inc (NASDAQ:AMD)).