Advanced Micro Devices Stock Has Nowhere to Go But Up
The annual Consumer Electronics Show (CES) is usually held in Las Vegas. This year, the tech industry’s premier event went virtual. Perhaps the most important keynote of CES 2021 was given by Advanced Micro Devices (NASDAQ:AMD) CEO Lisa Su. She gave notice that AMD is not finished with the astonishing run that has seen AMD stock nearly quadruple in value over the past two years. Far from it. New Ryzen 5000 mobile processors and third-generation Epyc server chips were unveiled, and they set the stage for yet another high-flying year for AMD.
AMD stock led the S&P 500 in 2019, a year when the index posted its biggest yearly gains in nearly two decades. The company followed that up with a 96% increase in share value for 2020.
No wonder this stock rates a solid “A” in Portfolio Grader! Based on what the company showed off at CES 2021, this year could be AMD’s best yet.
Ryzen 5000 Dominates CES 2021
A few weeks ago, I wrote that you should keep an eye on AMD at CES 2021. As it turns out, you would have had to work very hard to avoid seeing the company. AMD made headlines throughout the weeklong event.
The huge news was the launch of AMD’s Ryzen 5000 series of mobile processors. These advanced laptop chips are based on the company’s 7nm Zen 3 architecture. AMD is targeting two markets with the Ryzen 5000 mobile chips: ultraportable laptops and high-powered gaming laptops.
The U-series Ryzen 5000 chips combine high-performance computing with incredible battery life — AMD claims up to 21 hours of video playback for laptops equipped with these processors. The H-series is aimed at gamers, and AMD claims these are “the fastest mobile processors you can get.”
The company says that more than 150 laptops based on Ryzen 5000 chips will launch in 2021. In fact, CES 2021 was full of laptops touting new AMD Ryzen 5000 processors. Many of the models that ended up winning awards showcased the performance of the new AMD mobile chips.
PC Sales Are On the Rise
AMD’s timing for a resurgence couldn’t be better. The company continues to gain ground in the desktop PC market, and it’s now making the hottest laptop chips. With the pandemic turbocharging trends like working from home, remote learning and playing video games, PC sales surged in 2020. In a comeback no one saw coming after a decade of decline, PC sales were up between 11% and 13% (depending on whose figures you use) year-over-year in 2020.
They could have been even higher, if not for supply-chain disruptions.
The hottest category was laptops, which can be moved from spot to spot — important when families are fighting for space. With Advanced Micro Devices offering the fastest and most power-efficient mobile processors, laptop makers scrambling to adopt Ryzen 5000 chips and consumer demand for laptops on fire, AMD is in an enviable position for 2021.
Third-Generation Epyc Chips Set the Stage for a Showdown
There was more good news for AMD stock at CES 2021. The company also announced new third-generation Epyc processors aimed at the data-center market. In a demonstration, the new Epyc chips demolished the competition.
Advanced Micro Devices has already been making big gains in data-center sales. The new Epyc processors are positioned to accelerate growth in a global server market that was worth $22.6 billion in the last quarter.
Bottom Line on AMD Stock
The moves Advanced Micro Devices has been making have resulted in recent analyst upgrades, despite the stock’s high valuation. The company is in perfect position to make a major run at the lucrative data-center market. And at a time when the PC market is showing its highest growth in decades — with laptops especially in demand — AMD is launching the highly anticipated Ryzen 5000 mobile processor.
AMD stock may be off to a slow start this year, but just wait. Among the 35 investment analysts polled by CNN Business, AMD stock is a consensus buy with a $100 median price target. That represents an upside of around 13%, which is nothing to sneeze at. But I suspect AMD is primed to perform much better than that in 2021.
On the date of publication, Louis Navellier had a long position in AMD. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.
