Why AMD Stock Is Starting to Look Like a Chip-Tastic Bargain

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Lately, it seems like everyone’s forgotten what an important company Advanced Micro Devices (NASDAQ:AMD) is. Some traders have dumped their AMD stock shares as if they’re toxic. They’re pricing in the ongoing tension between the U.S. and China. Yet, investors shouldn’t dismiss Advanced Micro Devices, as the chipmaker’s products are still top-of-the-line and indispensable.

After all, the modern world can’t exist without microprocessors. They run our cars, computers and phones. There would be no Internet of Things (IOT) without semiconductors. And, Advanced Micro Devices makes some of the most powerful chips on the market.

So, I invite contrarian investors to lean into the volatility and grab shares of Advanced Micro Devices before they become expensive again. Chip-market opportunities like this are rare and could be quite lucrative for audacious traders.

Positive Catalysts Haven’t Been Factored Into AMD Stock

It amazes me how quickly investors can forget about positive news items. As soon as an apparent disaster strikes (such as the Sino-U.S. tech war), it grabs people’s attention and sometimes they panic-sell perfectly good stocks.

For instance, has Wall Street already forgotten about the recently enacted CHIPS and Science Act? This law earmarks more than $52 billion for American semiconductor-producing businesses, plus billions more in tax credits intended to boost chip-manufacturing investments.

Brent Kenwell’s commentary on this landmark law is definitely worth checking out. The point is, the U.S. government clearly stands behind domestic chipmakers like Advanced Micro Devices.

Today’s traders also seem to have forgotten that Advanced Micro Devices posted outstanding quarterly results. During 2022’s second quarter, the company grew its revenue 70% and its gross profit 65% year-over-year. Yet, somehow these impressive stats didn’t move the needle and AMD stock continued on its downward trajectory.

Advanced Micro Devices Releases Game-Changing Processors

Figuratively and literally, Advanced Micro Devices’ Ryzen 7000 Series desktop processors are bound to be a game-changer. It’s easy to forget, amid a tech cold war between the U.S. and China, that Advanced Micro Devices continues to drive innovation in the global microchip market.

Yet, investors shouldn’t ignore the company’s latest desktop-processor iteration. Ryzen 7000 is the “world’s first high-performance x86 5nm CPU,” and it features Advanced Micro Devices’ ultra-fast Zen 4 architecture.

Within this processor series, the 6-core Ryzen 5 7600X processor “offers an average of 5% faster gaming performance across select titles than the competitor’s flagship gaming processor.” Meanwhile, the Ryzen 7950X processor is “up to 47%” more energy-efficient than the comparable products offered by Advanced Micro Devices’ competitors.

It’s fine if you’re not familiar with all of the tech terminology surrounding these products. Just know that Advanced Micro Devices is relentlessly driven to beat the competition with fast, efficient microchips.

What You Can Do Now

To a great extent, tension between the U.S. and China has already been priced into AMD stock. Amazingly, the shares have lost half of their value this year.

Besides, Advanced Micro Devices continues to threaten its competitors with top-notch products. Therefore, Advanced Micro Devices’ investors should stay in the trade and consider adding to their positions while the shares are still cheap.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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