Tech giant Advanced Micro Devices (NASDAQ:AMD) is making strong strides in the industry despite the tech sell-off and recession concerns. A fundamentally strong company, AMD has suffered more than it deserved to. AMD stock is down 49% in the past six months and 28% over the past month. However, I think the market is overreacting and this is an opportunity to buy AMD stock. The company is set to report the quarterly results in July and the stock is a buy before that. Let’s look into why you should pick the tech stock.
|AMD||Advanced Micro Devices, Inc.||$73.40|
Long-term investors are concerned about the fundamentals of the company and this is where AMD shines bright. After the acquisition of Xilinx, the company got a boost in the first quarter results and its full-year outlook is looking impressive. It reported a 71% year-over-year jump in revenue in the first quarter. The revenue stood at $5.9 billion and it expects a 60% rise in full-year revenue which is projected to hit $26.3 billion. This is only the beginning for AMD and it could report a massive surge in revenue with Xilinx in its kitty.
The Market Is Overreacting
It is natural to overreact to bad news and with so much bad news coming our way, it looks like investors are overreacting to everything. The recent dip in the stock does not have to do anything with the company. There are no analyst downgrades, company news, or industry news that has led to the dip. It is a market overreaction and one that is temporary. Yes, it is expected that the growth will slow down as compared to the past year but there is a lot to look forward to. The bigger picture looks attractive and in favor of the tech industry. Despite the concerns about recession, the management expects to report annual revenue growth of 20% and this is nothing but impressive.
The demand for AMD’s products is steadily growing and the current economic situation will not be able to bring it down. Yes, there is a possibility of a slowdown in the short term but in the long term, AMD’s products are going to take charge.
The Bottom Line On AMD Stock
AMD stock has a price target of $103 and an “overweight” rating by Morgan Stanley analyst Joseph Moore. The analyst believes that the company is in a share gain position for the next couple of years and will continue to take share in cloud servers once the supply chain issues ease.
If AMD manages to report stellar quarterly results later this month, the stock could surge and it will continue to grow steadily. AMD stock has the potential to show a tremendous surge in value and it has many growth drivers working in its favor. The market’s reaction works to the advantage of long-term investors. Buy AMD stock before it is too late.
On the date of publication, Vandita Jadeja 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.