Shares of Advanced Micro Devices (AMD) Inc. last Thursday, February 29, showed a rapid increase in cost.
Currently, the mentioned chip manufacturer is on a steady positive dynamic trajectory. The development of the company in the current configuration of the implementation of the relevant process demonstrates reliable prospects.
On Thursday, the value of securities of the chip maker, which is approaching becoming one of the main beneficiaries of the so-called artificial intelligence boom, creating a platform for high levels of consumer demand for microcircuits, increased by 9.1%. Against the background of this result, the market capitalization of the company based in Sunnyvale, California, exceeded the significant mark of $300 billion. The corresponding indicator can be described as a kind of milestone in the history of the chip manufacturer, but so far there are no reliable guarantees that this figure will be long-term and maintain the dynamic of the growth. At the same time, the probability of a continuation of the positive trend is not minimal, it belongs to the category of relatively realistic scenarios.
On the last day of February, the chip manufacturer’s share price was fixed at a level that is more than twice the October low.
It is worth noting that AMD is currently considered by many experts as one of the main beneficiaries of artificial intelligence. It is worth noting that this characteristic is more about the potential of the brand. The chip manufacturer has not yet received the maximum benefit from the AI boom, but the corresponding probability is realistic.
The company expects revenue of about $5.4 billion in the first quarter of 2024. This figure is worse than analysts’ forecasts, which envisaged that the corresponding figure would reach $5.77 billion. The company’s expectations have become a factor in the negative impact on the cost of its shares. Also, the price of the chip manufacturer’s securities was impacted by the pessimistic assessment of rival Intel Corporation of the prospects for the further dynamic of markets of microcircuits for personal computers and data centers. At the same time, optimism about new artificial intelligence processors began to spread in January. Against the background of this trend, the recovery in the price of AMD shares has begun.
The company also expects that this year it will be able to earn more than $3.5 billion as a result of its activities on the sale of so-called artificial intelligence accelerators. The line of concerned products was presented in December. AI accelerators help companies develop artificial intelligence models by training these systems to huge amounts of data.
AMD Chief Executive Officer Lisa Su said she was confident in the relative merits of the company’s new chips. According to her, the market of relevant products is at the initial stage of large-scale expansion. Lisa Su believes that the overall demand for chips will improve in the second half of 2024.
This week, Citigroup Inc. reported its maximal optimistic outlook for the semiconductor sector. Experts of this financial institution, in the context of their positive forecast, note the fact that the artificial intelligence market is on a growth trajectory. Currently, technology companies and the firm of other specializations demonstrate a high and steady demand for AI chips. Analysts at Citigroup Inc. also named shares of AMD, Nvidia Corp., and Broadcom Inc. are the most promising in terms of prospects.
It is worth noting that currently, the value of the securities of the company headed by Lisa Su is almost 50 times more expensive than the expected profit. Against this background, buying brand shares is not guaranteed to be the right decision. However, the securities are still promising. Moreover, most analysts surveyed by the media recommend buying AMD securities.
As we have reported earlier, Meta and Microsoft to Buy AMD’s New AI Chip.
