- AMD disclosed its first-quarter earnings this week.
- According to the company, demand for artificial intelligence in data centres remains strong.
- At this moment, the stock seems very expensive.
Why Did Advanced Micro Devices Stock Rise This Week?
According to data from S&P Global Market Intelligence, Advanced Micro Devices (AMD) shares have risen 13.3% this week.
With strong sales from its data center sector in the first quarter, the semiconductor company that plays Robin to Nvidia’s Batman is on its way back to all-time highs. This comes after the company reported great sales from its data center sector.
More data center demand
AMD, which stands for Advanced Micro Devices, is a company that manufactures computer chips for use in personal computing devices and data centers.
The revolution in artificial intelligence, which continued throughout the first quarter, has been a major success for it. The majority of the company’s expansion was driven by data center revenue, which climbed 57% to $5.8 billion, taking total revenue to $10.25 billion, a 38% rise.
AMD has signed dozens of deals with hyperscale artificial intelligence companies, including one with Meta Platforms to deploy 1 gigawatt of supply in the second half of this year.
During its conference call, AMD said it has secured contracts in its supply chain, a favorable sign for the company’s 46% revenue increase in the second quarter and for ongoing demand throughout the year.
Should you buy AMD stock?
Intelligence is a game-changer for AMD. On the other hand, this does not mean you should flood your portfolio with the stock with a market value of $660 billion. Both the price-to-sales ratio (P/S) and the price-to-earnings ratio (P/E) of the company are currently 18 and 134, respectively.
If the company is expected to remain successful due to AI, then many of these advantages are already incorporated into the market.
This Tech Could Be Worth 18 Nvidias
According to Nvidia’s chief executive officer, there is one discovery that could create more billionaires in the next five years than the internet did in the previous 20 years.
Amazon’s Jeff Bezos has said that it is “impossible to overestimate” the impact of the event. Cathie Wood estimates that artificial intelligence could be worth $80 trillion by 2030. This is equivalent to 13 Amazons, 21 Microsofts, and 18 Nvidias.
However, the majority of investors fail to see that almost all of that development is driven by a single choke point.
A relatively unknown company, dubbed an “Indispensable Monopoly,” is the provider of the essential technology that Nvidia, AMD, and Intel cannot function without. However, it is still a small fraction of Nvidia’s size. We recently released a new report that includes the company’s name and the full story.