Date
stringdate 2022-01-02 00:00:00
2024-01-09 00:00:00
| Symbol
stringclasses 255
values | Article
stringlengths 339
179k
|
|---|---|---|
2024-01-09
|
AMD
|
The iShares Semiconductor ETF (SOXX) was launched on 07/10/2001, and is a smart beta exchange traded fund designed to offer broad exposure to the Technology ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $9.93 billion, which makes it one of the largest ETFs in the Technology ETFs. SOXX, before fees and expenses, seeks to match the performance of the PHLX SOX Semiconductor Sector Index.
The ICE Semiconductor Index measures the performance of U.S. traded securities of companies engaged in the semiconductor business.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.35% for SOXX, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.81%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 100% of the portfolio, the fund has heaviest allocation to the Information Technology sector.
Taking into account individual holdings, Advanced Micro Devices Inc (AMD) accounts for about 9.48% of the fund's total assets, followed by Broadcom Inc (AVGO) and Intel Corporation Corp (INTC).
SOXX's top 10 holdings account for about 59.63% of its total assets under management.
Performance and Risk
So far this year, SOXX has lost about -2.88%, and was up about 55.09% in the last one year (as of 01/09/2024). During this past 52-week period, the fund has traded between $373.83 and $581.45.
The ETF has a beta of 1.37 and standard deviation of 34.63% for the trailing three-year period, making it a high risk choice in the space. With about 35 holdings, it has more concentrated exposure than peers.
Alternatives
IShares Semiconductor ETF is an excellent option for investors seeking to outperform the Technology ETFs segment of the market. There are other ETFs in the space which investors could consider as well.
SPDR S&P Semiconductor ETF (XSD) tracks S&P Semiconductor Select Industry Index and the VanEck Semiconductor ETF (SMH) tracks MVIS US Listed Semiconductor 25 Index. SPDR S&P Semiconductor ETF has $1.42 billion in assets, VanEck Semiconductor ETF has $11.67 billion. XSD has an expense ratio of 0.35% and SMH charges 0.35%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Technology ETFs.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want key ETF info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.
Get it free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
iShares Semiconductor ETF (SOXX): ETF Research Reports
Intel Corporation (INTC) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Broadcom Inc. (AVGO) : Free Stock Analysis Report
VanEck Semiconductor ETF (SMH): ETF Research Reports
SPDR S&P Semiconductor ETF (XSD): ETF Research Reports
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-09
|
AMD
|
U.S. stock markets closed sharply higher on Monday after finishing the first week of 2024 in red. Technology stocks rebounded following a decline in the yield of U.S. government bond yield. However, the time when the Fed will initiate first interest rate cut remained uncertain. All three major stock indexes ended in positive territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) was up 0.6% or 216.9 points to close at 37,683.01. At intraday low, the blue-chip index was down nearly 217 points. Notably, 23 components of the 30-stock index ended in positive territory, while 7 ended in negative zone.
The tech-heavy Nasdaq Composite finished at 14,843.77 or 319.70 points, jumping 2.2% due to strong performance of large-cap technology stocks. Tech behemoths like CrowdStrike Holdings Inc. CRWD and Advanced Micro Devices Inc. AMD, advanced 5.5% and 5.4%, respectively. CrowdStrike Holdings currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The S&P 500 climbed 1.4% to finish at 4,763.54. Seven out of 10 broad sectors of the broad-market index ended in positive territory while one in negative zone. The Communication Services Select Sector SPDR (XLC), the Technology Select Sector SPDR (XLK) and the Consumer Discretionary Select SPDR (XLY) and the Real Estate Select Sector SPDR (XLRE) advanced 1.6%, 2.5%, 1.7% and 1.4%, respectively. On the other hand, the Energy Select Sector SPDR (XLE) decline 1.6%.
The fear-gauge CBOE Volatility Index (VIX) was down 2% to 13.08. Advancers outnumbered decliners on the NYSE by a 3-to-1 ratio. On Nasdaq, a 2.3-to-1 ratio favored advancing issues. The S&P 500 posted 13 new highs and no new lows while the Nasdaq recorded 101 new highs and 92 new lows.
U.S. Economy Cooling
The Institute of Supply Management (ISM) reported that the manufacturing Index for December came in at 47.4, marginally ahead of the consensus estimate of 47.2. The reading for November was 46.7. Any reading below 50 indicates a contraction in manufacturing activities.
December marked the 14th consecutive month of manufacturing contraction after 28th months of expansion. The new orders Index remained in contraction territory at 47.1, lower than November’s reading of 48.3.
The ISM also reported that the services Index for December came in at 50.6, reflecting the 12th consecutive months of expansion. Any reading above 50 indicates an expansion in services activities. However, the metric was lower than November’s data of 52.7 and the consensus estimate of 52.5.
The sub index for new orders came in at 52.8 in December compared with 55.5 in November. The sub index for employment contracted to 43.3 in December from 50.7 in November. December’s data was the lowest since May 2020.
Labor Market Remains Resilient
The Department of Labor reported that the U.S. economy added 216,000 jobs in December, beating the consensus estimate of 170,000. However, the metric for November was revised downward to 173,000 from 199,000.
The unemployment rate in December was 3.7%, flat month over month but below the consensus estimate of 3.8%. The average hourly wage rate increased 0.4% in December, flat with November but higher than the consensus estimate of 0.3%. Year over year, the wage rate increased 4.1% in December, beating the consensus estimate of 3.9%.
Uncertainty on Rate Cut
Market participants remained clueless when the Fed will initiate first rate cut. Federal Reserve Governor Michelle Bowman said that she believes rate hike cycle is over. However, she is not yet convinced that the economy is in proper shape to initiate interest rate cut anytime soon.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2023. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
CrowdStrike (CRWD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-09
|
AMD
|
TOKYO, Jan 9 (Reuters) - Japan's Nikkei share average hit its highest level since March 1990 on Tuesday, as investors snapped up chip-related stocks tracking an overnight Wall Street rally in technology shares.
The Nikkei .N225 was up 1.44% at 33858.63 by the mid-day break, after hitting a 33-year high of 33990.28 earlier. Of the 225 stocks on the index, 151 advanced.
The broader Topix index .TOPX was up 0.93%.
Chip-related stocks, which tend to move the benchmark, led the Nikkei's rise after chipmakers Nvidia NVDA.O and Advanced Micro Devices AMD.O surged on Wall Street overnight. .N
Tokyo Electron 8035.T and Advantest 6857.T, up 4.27% and 7.06% respectively, combined were pushing the index up around 200 points.
Nintendo 7974.T also made the top performers in the morning session, extending recent gains to move up 4.22%, as news swirled that the company might release a new game console this year.
DeNA 2432.T led the pack, gaining 7.83%, after making an after-market announcement on Friday it would commence preparations to list shares for an equity-method affiliate company.
The Nikkei clocked its best year in a decade in 2023, aided by expectations of better governance.
After an initial pullback to start 2024, the Nikkei rallied an additional 1.6% from last year's final trading day to hit Tuesday's peak since Japan's asset price bubble burst in 1989.
"I think a correction may not come as soon as next week or this week, but I'm a bit cautious, if not a little bit pessimistic over the near term" over the next few months, as markets assess the latest policy decisions by the Fed and Bank of Japan, said Naka Matsuzawa, chief macro strategist at Nomura.
Meanwhile, energy shares were among the worst performers, after oil prices fell about 4% on Monday on sharp price cuts by top exporter Saudi Arabia. The Tokyo Stock Exchange's mining stock sub-index .IMING.T dropped 1.55%.
(Reporting by Brigid Riley; Editing by Rashmi Aich)
((brigid.riley@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-09
|
AMD
|
The trillion-dollar club is certainly rarified air, and one that every company aspires to join. Investors, of course, aspire to find the next candidate with the potential to join such elite company. Odds are, every company that has reached that milestone has made many fortunes for investors along the way.
Case in point: Artificial intelligence (AI) chip star Nvidia (NASDAQ: NVDA) began 2023 at just a $350 billion market cap, but has more than tripled since, reaching a market cap today exceeding $1.2 trillion!
So, where to find the next big winner? It may not be surprising that I think the AI revolution could mint even more trillion-dollar companies, like this key Nvidia rival.
Can Advanced Micro Devices catch up?
Given the explosive growth in AI computing we are seeing and are likely to see through this decade, those tailwinds could potentially propel Advanced Micro Devices (NASDAQ: AMD) to new heights.
That is, of course, only true if the company executes. But AMD's execution has been excellent ever since Lisa Su took over as CEO in October 2014. Back then, AMD had just a $2.4 billion market cap -- yes, you read that right. Fast forward to today, and AMD's market cap has gone up nearly one hundred times under her tenure, to $223 billion.
AMD Market Cap data by YCharts
How did AMD do it? As is usually the case, a lot of skill, planning, and a little bit of luck.
First, Su made the choice to diversify away from PCs, where AMD got 90% of its revenue at the time, and into more high-end applications such as gaming, embedded chips, and data center processors. Second, Su used the 2017 transition to FinFet transistors to attempt to catch up to market leader Intel in process technology.
At the time, Intel had a near-monopoly on the processor market and leading technology. AMD practically existed just so many customers would have a secondary option for cheap processors and keep Intel from having 100% of the market. But as chipmaking became more complex, with FinFets and the 7-nanometer process node, Intel stumbled.
Meanwhile, AMD's foundry partner Taiwan Semiconductor Manufacturing (NYSE: TSM) excelled and pulled ahead of Intel on leading-edge chipmaking. That left an opportunity for AMD to actually leap ahead of Intel in terms of power and performance, enabling it to gobble up market share from a near-zero starting point.
Can AMD pull off the same feat in artificial intelligence chips?
Given that AMD was able to meet and overtake a large and dominant rival in PC processors, can the company do it again with AI accelerators?
While Nvidia has a big lead in that area today, AMD introduced its challenger MI300 line of AI accelerators in June 2023. The MI300, unlike the all-in-one die that hosts Nvidia's H100, is made up of a "chiplet" architecture consisting of 12 chiplets. That architecture allows for some advantages, including a whopping 153 billion transistors, with the ability to handle 192 gigabytes of HBM3 memory. That compares with the H100's "mere" 80 billion transistors and just 80GB of HBM memory capacity.
In light of these specs, AMD certainly has a shot at getting some looks from AI customers, especially those with memory-hungry applications. No wonder Su has said she expects at least $2 billion in revenue for the MI300 accelerators in 2024, despite just ramping production recently.
Can AMD compete with Nvidia in AI? Image source: AMD.
But Nvidia should still remain a leader for the foreseeable future
While the MI300 exceeds the H100 on certain specs, investors shouldn't expect AMD to match Nvidia any time soon. One important difference is that the MI300 doesn't have the transformer engine of the H100, which can be turned on to triple the H100's performance. That would, of course, shorten the time to train large language models, and could keep customers in the H100 for the most pressing applications.
Another advantage for Nvidia is that it will already be coming out with the H200 in the second quarter, and will move on to an entirely new architecture, the B100, next fall/winter. In October 2023, Nvidia announced that it would move from a two-year cadence to a one-year cadence for new AI chip architectures. Given that AMD is just ramping the MI300 now, it will actually be competing more with these newer chips than with the H100. And since Nvidia is now going into turbo-speed, it may be hard for AMD to eventually catch up.
This is especially true because Nvidia also uses TSMC as its foundry, so Nvidia will likely not stumble in the way Intel did five years ago. If TSMC stumbles, both Nvidia and AMD would suffer together.
In addition, Nvidia has been developing its CUDA software stack since 2006, and has achieved a nice network effect with developers. AMD is quickly developing its own quasi-open-source software stack called RocM, which it's piecing together from its own research and development combined with several recent acquisitions last year. Still, a 15-year-plus head start will be difficult to overcome quickly.
But $1 trillion is still in sight by 2030
Even if AMD forever remains a "next-best" option for AI chips, it's possible the AI market could be large enough that AMD will reach $1 trillion anyway. After all, at its December 2023 presentation, Su increased her projection for the AI chip market from $150 billion to $400 billion by 2027.
While some of that increase comes from chips for "AI PCs," the good news is that AMD will potentially have an even better chance at leading that market, considering its strong position in PCs today.
AMD hit $24 billion in revenue in 2022 before the PC downturn caused a slight dip this year. But even an incremental 10% of the $400 billion AI chip market could propel AMD's revenue to, say, $65 billion by 2027. Assuming a 30% net income margin, that could yield $20 billion in earnings. So a price-to-earnings multiple of 50 could get AMD to a $1 trillion market cap by that time.
That may seem like a high valuation, but it's a pretty good bet that the AI chip market will continue growing beyond 2027. It's also quite possible AMD could get more than that modest 10% share of the AI chip market. So by 2030, it's certainly a fair shot to get to that $1 trillion market cap, more than four times today's valuation.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of the S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Billy Duberstein has positions in Taiwan Semiconductor Manufacturing. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-09
|
AMD
|
For Immediate Release
Chicago, IL – January 9, 2024 – Today, Zacks Equity Research discusses Advanced Micro Devices AMD, ASE Technology ASX, Cirrus Logic CRUS and QuickLogic QUIK.
Industry: Semiconductors
Link: https://www.zacks.com/commentary/2206808/4-electronics-semiconductor-stocks-to-escape-macro-headwinds
The challenging global macroeconomic environment and end-market volatility have affected the Zacks Electronics - Semiconductors industry. Geo-political tensions, unfavorable forex and rising inflationary pressure also weigh heavily on the industry's prospects.
Nevertheless, industry players likeAdvanced Micro Devices, ASE Technology, Cirrus Logic and QuickLogic have been benefiting from the increasing demand for high-volume consumer electronic devices, such as digital media players, smartphones and tablets, and the strong uptake of efficient packaging, machine vision solutions and robotics.
Additionally, the growing proliferation of AI, Machine Learning, Blockchain, Internet of Things, Augmented Reality/Virtual Reality (AR/VR) and industrial revolution 4.0 (which focuses on interconnectivity and automation) should continue to drive the industry's growth. Easing supply-chain constraints are also benefiting the industry participants.
Industry Description
The Zacks Electronics – Semiconductors industry comprises firms that provide a wide range of semiconductor technologies. Their offerings include packaging and test services, wafer cleaning, factory automation, face detection and image-recognition capabilities to develop intelligent and connected products. The participants primarily cater to end-markets constituting consumer electronics, communications, computing, industrial and automotive.
These companies are raising their spending on research and development to stay afloat in an era of technological advancements and changing industry standards. The underlined industry is experiencing solid demand for advanced electronic equipment, helping these firms increase their investments in cost-effective process technologies.
What's Shaping the Future of the Electronics - Semiconductors Industry?
Macroeconomic Headwinds Pose Concerns: Rising inflationary pressure and fears of global recession have negatively impacted the rate of deal wins. Due to the challenging macroeconomic scenario, enterprises are reluctant to sign multi-year deals worldwide. These trends do not bode well for the industry participants.
Geo-political Tensions Are Worrisome: The ongoing Russia-Ukraine war and, most importantly, the souring relationship between the United States and China are creating headwinds. Increasing dependency on AI-backed electronic devices on semiconductors and current restrictions ordered by the United States on trading with China, the main hub for chip production, is a significant negative for the underlined industry.
Smart Devices Aiding Computing Demand: Smart devices need computing and learning capabilities to perform face detection, image recognition and video analytics capabilities. These require high processing power, speed and memory; low power consumption; and better graphic processors and solutions, which bode well for the industry. Graphic solutions help increase the image rendering rate, and improve image resolution and color definition.
Zacks Industry Rank Indicates Bleak Prospects
The Zacks Electronics - Semiconductors industry is housed within the broader Zacks Computer and Technology sector. It currently carries a Zacks Industry Rank #189, which places it in the bottom 25% of more than 250 Zacks industries.
The group's Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates solid near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry's positioning in the bottom 50% of the Zacks-ranked industries is a result of the negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group's earnings growth potential. Since Sep 30, 2023, the industry's earnings estimates for the current year have moved 4.2% down.
Despite the gloomy industry outlook, a few stocks have the potential to outperform the market based on a strong earnings outlook. But before we present the top industry choices, it is worth taking a look at the industry's shareholder returns and current valuation first.
Industry Outperforms S&P 500 & Sector
The Zacks Electronics - Semiconductors industry has outperformed the Zacks S&P 500 composite and surpassed the broader Zacks Computer and Technology sector in the past year.
The companies in the industry have collectively surged 74.6% compared with the S&P 500 and the broader sector's rallies of 22% and 45.1%, respectively.
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing electronics semiconductors stocks, the industry is currently trading at 25.67X versus the S&P 500 and the sector's 19.6X and 24.04X, respectively.
Over the past five years, the industry has traded as high as 44.41X, as low as 9.35X and recorded a median of 16.55X.
4 Electronics Semiconductor Stocks to Watch
Cirrus Logic: Austin, TX-headquartered CRUS is gaining from strong customer engagement across its portfolio. Strength across Cirrus Logic's audio and haptic solutions remains a plus point. Growing momentum across advanced power and battery-related technologies is a positive.
The Zacks Rank #1 (Strong Buy) company, which develops, manufactures and markets analog, mixed-signal and audio DSP integrated circuits, is expected to gain well from its deepening focus on next-generation technology like wearables, gaming and AR/VR. The company is increasing the production of its camera controller product for smartphones, which is another positive.
You can see the complete list of today's Zacks #1 Rank stocks here.
Cirrus Logic has lost 4% in the past year. The Zacks Consensus Estimate for the company's fiscal 2024 earnings has moved north by 0.4% to $5.26 per share in the past 60 days.
QuickLogic: The San Jose, CA-based company develops ultra-low-power multi-core voice-enabled SoCs, embedded FPGA IP and Endpoint AI solutions. QUIK is gaining from the growing demand for its IP-related products. Strength in its technology and Australis IP generator is noteworthy.
A solid momentum in QuickLogic's Strategic Radiation Hardened FPGA Technology is another major positive. Growing contributions from the large government contract for this particular technology are driving the company's top-line growth. Apart from this, the Zacks Rank #2 (Buy) company is benefiting from increasing conversions from funnel opportunities, which are leading to new bookings.
QuickLogic has gained 153.8% in the past year. The Zacks Consensus Estimate for QUIK's 2023 earnings has moved north by 120% to 11 cents per share over the last 60 days.
Advanced Micro Devices: The Santa Clara-based company is benefiting from portfolio strength and an expanding partner base. Strong demand for EPYC processors has been a growth driver. The launch of the Ryzen 8040 series processor with Ryzen AI and Instinct MI300 Series data center AI accelerators bodes well for AMD's top-line growth.
The Zacks Rank #3 (Hold) company offers a wide range of high-performance and adaptive processor technologies, combining CPUs, GPUs, FPGAs, Adaptive SoCs and deep software expertise. The company expects to witness strong growth in the data center market, thanks to the solid adoption of fourth-generation AMD EPYC CPUs.
Advanced Micro Devices has gained 106.1% in a year. The Zacks Consensus Estimate for AMD's 2023 earnings was unchanged at $2.65 per share over the last 60 days.
ASE Technology: The Taiwan-based provider of semiconductor manufacturing services in assembly and test is gaining from its robust ATM business, which is riding on the solid momentum across product categories, such as wire-bond and advanced packaging, test solutions, consumer, communications, and computing. The strengthening utilization of ATM factory lines remains another positive. The increasing use of advanced packaging in applications across computing and communications end markets is a tailwind for ASX.
The Zacks Rank #3 company is well-positioned to capitalize on the increased consumer demand for small and delicate electronics solutions on strength in wire-bonded products and advanced packaging.
ASE Technology has gained 24.6% in the past year. The Zacks Consensus Estimate for ASX's 2023 earnings was unchanged at 44 cents per share over the last 60 days.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Join us on Facebook: https://www.facebook.com/ZacksInvestmentResearch/
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2023. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report
QuickLogic Corporation (QUIK) : Free Stock Analysis Report
ASE Technology Holding Co., Ltd. (ASX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-09
|
AMD
|
Advanced Micro Devices AMD is expanding its gaming portfolio with the launch of the Radeon RX 7600 XT graphics card. The graphics card features 16GB of high-speed GDDR6 memory that supports next-generation AI and content creation workloads. The new graphics card improves AMD’s competitive prowess against NVIDIA NVDA.
Users with AMD’s latest graphics card, in support with AMD FidelityFX Super Resolution and AMD HYPR-RX with AMD Fluid Motion Frames, can deliver up to 1.9 times faster gaming and raytracing performance than the NVIDIA GeForce RTX 2060.
AMD Radeon RX 7600 XT graphics card is expected to be available beginning Jan 24, 2024, from leading AMD board partners, including Acer, ASRock, ASUS, Gigabyte, PowerColor, Sapphire and XFX.
AMD is also expanding its desktop portfolio with the introduction of the new Ryzen 8000G series desktop processors for the AM5 platform, including the Ryzen 7 8700G, with the world’s most powerful built-in graphics. AMD Ryzen 8000G series features up to eight cores and 16 threads.
AMD is also introducing Ryzen AI to unlock more AI for desktop consumers. Moreover, AMD is introducing new Ryzen 5000 processors that include the new Ryzen 7 5700X3D, leveraging powerful 3D V-Cache technology.
Advanced Micro Devices, Inc. Price and Consensus
Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote
AMD’s Prospects Remain Bright
AMD’s expanding portfolio is driving its prospects. It recently launched the Ryzen 8040 series processor with Ryzen AI and Instinct MI300 Series data center AI accelerators. The company also introduced the ROCm 6 open software stack with significant optimizations and new features supporting Large Language Models.
The latest Ryzen 8040 series mobile processors, when combined with Ryzen AI NPU on-die, extend AMD’s leadership position in the AI-supported PC markets.
Systems leveraging Ryzen 8040 series processors will be globally available from leading original equipment manufacturers, including Acer, Asus, Dell Technologies DELL, HP, Lenovo and Razer, beginning in 2024.
AMD is expanding its data center footprint with the new Instinct MI300X accelerator. It combines CDNA 3 architecture and Zen 4 CPUs to deliver robust performance for HPC and AI workloads. Partners like Microsoft MSFT, Oracle and Dell are already using the accelerators in their systems.
Microsoft is using AMD’s Instinct accelerator portfolio in its new Azure ND MI300x v5 virtual machine series, optimized for AI workloads.
AMD, which currently carries a Zacks Rank #3 (Hold), expects fourth-quarter 2023 revenues to be $6.1 billion (+/-$300 million), which indicates year-over-year growth of 9% and 5% sequentially at the mid-point. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
AMD expects to witness year-over-year growth in the Data Center and Client segments by double-digit percentage. Sequentially, the Data Center segment’s revenues are expected to grow on a double-digit percentage, while Client is expected to increase.
The Zacks Consensus Estimate for fourth-quarter 2023 revenues is pegged at $6.11 billion, indicating 9.2% year-over-year growth. The consensus estimate for earnings is pegged at 77 cents per share, suggesting 11.59% year-over-year growth.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2023. Previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Dell Technologies Inc. (DELL) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-09
|
AMD
|
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum and price momentum.
ADVANCED MICRO DEVICES, INC. (AMD) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
FUNDAMENTAL MOMENTUM: PASS
TWELVE MINUS ONE MOMENTUM: PASS
FINAL RANK: PASS
Detailed Analysis of ADVANCED MICRO DEVICES, INC.
AMD Guru Analysis
AMD Fundamental Analysis
More Information on Dashan Huang
Dashan Huang Portfolio
About Dashan Huang: Dashan Huang is an Assistant Professor of Finance at the Lee Kong Chian School of Business at Singapore Management University. His paper "Twin Momentum" looked at combining traditional price momentum with improving fundamentals to generate market outperformance. In the paper, he identified seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that he combined into a single fundamental momentum measure. He showed that stocks in the top 20% of the universe according to that measure outperformed the market going forward. When he combined that measure with price momentum, he was able to double its outperformance.
Additional Research Links
Top NASDAQ 100 Stocks
Top Technology Stocks
Top Large-Cap Growth Stocks
High Momentum Stocks
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
The challenging global macroeconomic environment and end-market volatility have affected the Zacks Electronics - Semiconductors industry. Geo-political tensions, unfavorable forex and rising inflationary pressure also weigh heavily on the industry’s prospects.
Nevertheless, industry players like Advanced Micro Devices AMD, ASE Technology ASX, Cirrus Logic CRUS and QuickLogic QUIK have been benefiting from the increasing demand for high-volume consumer electronic devices, such as digital media players, smartphones and tablets, and the strong uptake of efficient packaging, machine vision solutions and robotics. Additionally, the growing proliferation of AI, Machine Learning, Blockchain, Internet of Things, Augmented Reality/Virtual Reality (AR/VR) and industrial revolution 4.0 (which focuses on interconnectivity and automation) should continue to drive the industry’s growth. Easing supply-chain constraints are also benefiting the industry participants.
Industry Description
The Zacks Electronics – Semiconductors industry comprises firms that provide a wide range of semiconductor technologies. Their offerings include packaging and test services, wafer cleaning, factory automation, face detection and image-recognition capabilities to develop intelligent and connected products. The participants primarily cater to end-markets constituting consumer electronics, communications, computing, industrial and automotive. These companies are raising their spending on research and development to stay afloat in an era of technological advancements and changing industry standards. The underlined industry is experiencing solid demand for advanced electronic equipment, helping these firms increase their investments in cost-effective process technologies.
What's Shaping the Future of the Electronics - Semiconductors Industry?
Macroeconomic Headwinds Pose Concerns: Rising inflationary pressure and fears of global recession have negatively impacted the rate of deal wins. Due to the challenging macroeconomic scenario, enterprises are reluctant to sign multi-year deals worldwide. These trends do not bode well for the industry participants.
Geo-political Tensions Are Worrisome: The ongoing Russia-Ukraine war and, most importantly, the souring relationship between the United States and China are creating headwinds. Increasing dependency on AI-backed electronic devices on semiconductors and current restrictions ordered by the United States on trading with China, the main hub for chip production, is a significant negative for the underlined industry.
Smart Devices Aiding Computing Demand: Smart devices need computing and learning capabilities to perform face detection, image recognition and video analytics capabilities. These require high processing power, speed and memory; low power consumption; and better graphic processors and solutions, which bode well for the industry. Graphic solutions help increase the image rendering rate, and improve image resolution and color definition.
Zacks Industry Rank Indicates Bleak Prospects
The Zacks Electronics - Semiconductors industry is housed within the broader Zacks Computer and Technology sector. It currently carries a Zacks Industry Rank #189, which places it in the bottom 25% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates solid near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of the negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are pessimistic about this group’s earnings growth potential. Since Sep 30, 2023, the industry’s earnings estimates for the current year have moved 4.2% down.
Despite the gloomy industry outlook, a few stocks have the potential to outperform the market based on a strong earnings outlook. But before we present the top industry choices, it is worth taking a look at the industry’s shareholder returns and current valuation first.
Industry Outperforms S&P 500 & Sector
The Zacks Electronics - Semiconductors industry has outperformed the Zacks S&P 500 composite and surpassed the broader Zacks Computer and Technology sector in the past year.
The companies in the industry have collectively surged 74.6% compared with the S&P 500 and the broader sector’s rallies of 22% and 45.1%, respectively.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing electronics semiconductors stocks, the industry is currently trading at 25.67X versus the S&P 500 and the sector’s 19.6X and 24.04X, respectively.
Over the past five years, the industry has traded as high as 44.41X, as low as 9.35X and recorded a median of 16.55X, as the chart below shows.
Price/Earnings Ratio (F12M)
4 Electronics Semiconductor Stocks to Watch
Cirrus Logic: Austin, TX-headquartered CRUS is gaining from strong customer engagement across its portfolio. Strength across Cirrus Logic’s audio and haptic solutions remains a plus point. Growing momentum across advanced power and battery-related technologies is a positive.
The Zacks Rank #1 (Strong Buy) company, which develops, manufactures and markets analog, mixed-signal and audio DSP integrated circuits, is expected to gain well from its deepening focus on next-generation technology like wearables, gaming and AR/VR. The company is increasing the production of its camera controller product for smartphones, which is another positive.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Cirrus Logic has lost 4% in the past year. The Zacks Consensus Estimate for the company’s fiscal 2024 earnings has moved north by 0.4% to $5.26 per share in the past 60 days.
Price and Consensus: CRUS
QuickLogic: The San Jose, CA-based company develops ultra-low-power multi-core voice-enabled SoCs, embedded FPGA IP and Endpoint AI solutions. QUIK is gaining from the growing demand for its IP-related products. Strength in its technology and Australis IP generator is noteworthy.
A solid momentum in QuickLogic’s Strategic Radiation Hardened FPGA Technology is another major positive. Growing contributions from the large government contract for this particular technology are driving the company’s top-line growth. Apart from this, the Zacks Rank #2 (Buy) company is benefiting from increasing conversions from funnel opportunities, which are leading to new bookings.
QuickLogic has gained 153.8% in the past year. The Zacks Consensus Estimate for QUIK’s 2023 earnings has moved north by 120% to 11 cents per share over the last 60 days.
Price and Consensus: QUIK
Advanced Micro Devices: The Santa Clara-based company is benefiting from portfolio strength and an expanding partner base. Strong demand for EPYC processors has been a growth driver. The launch of the Ryzen 8040 series processor with Ryzen AI and Instinct MI300 Series data center AI accelerators bodes well for AMD’s top-line growth.
The Zacks Rank #3 (Hold) company offers a wide range of high-performance and adaptive processor technologies, combining CPUs, GPUs, FPGAs, Adaptive SoCs and deep software expertise. The company expects to witness strong growth in the data center market, thanks to the solid adoption of fourth-generation AMD EPYC CPUs.
Advanced Micro Devices has gained 106.1% in a year. The Zacks Consensus Estimate for AMD’s 2023 earnings was unchanged at $2.65 per share over the last 60 days.
Price and Consensus: AMD
ASE Technology: The Taiwan-based provider of semiconductor manufacturing services in assembly and test is gaining from its robust ATM business, which is riding on the solid momentum across product categories, such as wire-bond and advanced packaging, test solutions, consumer, communications, and computing. The strengthening utilization of ATM factory lines remains another positive. The increasing use of advanced packaging in applications across computing and communications end markets is a tailwind for ASX.
The Zacks Rank #3 company is well-positioned to capitalize on the increased consumer demand for small and delicate electronics solutions on strength in wire-bonded products and advanced packaging.
ASE Technology has gained 24.6% in the past year. The Zacks Consensus Estimate for ASX’s 2023 earnings was unchanged at 44 cents per share over the last 60 days.
Price and Consensus: ASX
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Cirrus Logic, Inc. (CRUS) : Free Stock Analysis Report
QuickLogic Corporation (QUIK) : Free Stock Analysis Report
ASE Technology Holding Co., Ltd. (ASX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
If you invested in just about any of the big tech stocks earlier last year, chances are you made a decent return by year’s end. The Nasdaq, which tracks many of the major technology equities, rose by 43.4% in 2023, beating all other major indices. Now that we’re in 2024, it’s time to reexamine some of these tech giants and see which ones are poised for massive growth in the coming quarters.
Advanced Micro Devices (AMD)
Source: JHVEPhoto / Shutterstock.com
Last year, Advanced Micro Devices (NASDAQ:AMD), one of the more prominent fabless CPU and GPU makers in the market, announced how it would tackle the AI market. In particular, during their second-quarter earnings report, the chipmaker finally announced the MI300x GPU chipset, which will compete directly with Nvidia’s A100 and H100 chips used to train LLMs. The chipmaker announced it expects to sell $2 billion in AI chips next year.
While, in 2023, AMD’s shares performed somewhat inconsistently due to traders betting on the company’s long-awaited AI chips but at the same time bearing worries about the slowing PC market, AMD’s stock more than doubled and could be on its way to another great year.
2024 will have to be the year AMD proves it can compete with Nvidia (NASDAQ:NVDA) in churning out high-performance chips for large language models (LLMs) and data centers. AMD has definitely overcome competitors as an underdog, and it would not surprise me if the chipmaker did it again.
CrowdStrike (CRWD)
Source: Michael Vi / Shutterstock
CrowdStrike (NASDAQ:CRWD) is a cybersecurity firm on the rise, and the company has undoubtedly come a long way. According to IDC, CrowdStrike was the largest player in the Worldwide Endpoint Security market in 2022, even outpacing Microsoft (NASDAQ:MSFT).
CrowdStrike specializes in cloud-based endpoint protection and threat intelligence services. The company’s comprehensive platform leverages artificial intelligence, behavioral analytics, and threat intelligence to detect and prevent breaches.
CrowdStrike’s shares have climbed more than 140% by the end of 2023. The stock’s market cap currently exceeds $62 billion. As the company continues to leverage AI in its endpoint security products, CrowdStrike could attract more customers and grow its business.
Multiple earnings beats in 2023 show CrowdStrike’s solutions were in demand despite a volatile macro-environment. Many enterprises have cybersecurity at the forefront of their digital transformation efforts and uncertainty in the economy is less likely to upend those plans. CrowdStrike has much to benefit from here.
Meta Platforms (META)
Source: Chinnapong / Shutterstock.com
Having a massive user base of nearly 4.0 billion monthly active users across its family of apps including Facebook, Instagram, WhatsApp, and Messenger, Meta Platforms (NASDAQ:META) is the third company on this list that is ready for massive growth. The number of cumulative users alone gives Meta an impressive edge in building out and testing its novel social media endeavor.
Today, Meta Platforms has focused on pioneering contemporary metaverse conceptualization. While Meta had certainly dipped its toes in virtual reality (VR) in the past, lately the social media giant has plowed more capital into Facebook Reality Labs, a research division that develops cutting-edge technologies for augmented reality, haptics, and neural interfaces. Operational efficiencies and decent revenue growth brought Meta a very profitable Q3 2023. This can also prepare the company to focus resources on its most innovative products, which could catapult the company into an era of renewed growth.
On the date of publication, Tyrik Torres 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.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post 3 Technology Titans Poised for Massive Growth appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Machine learning is transforming sectors including healthcare and transportation, offering lucrative opportunities in the best machine learning stocks. However, investors should approach cautiously, as not all stocks in this sector ensure returns. Discernment is key, as many firms claim advanced machine learning needs more solid business models or definitive applications.
Moreover, this sector branches into specialized niches, including data analysis and artificial intelligence (AI), with machine learning being a key driver. Some businesses have made remarkable strides in this space, demonstrating commendable growth and innovation. Their work within machine learning is remarkable, effectively reshaping the way we interact with technology. Subsequently, Statista projects that the machine-learning market will reach $204.30 billion by 2024.
Furthermore, machine learning stocks are gaining momentum, reflecting a growing fascination with AI. This expanding field holds substantial growth prospects, offering investors opportunities to support the innovators shaping our tech future. For those seeking the next breakthrough, machine learning stocks could be the secret to forge the billionaires of tomorrow.
Amazon (AMZN)
Source: Claudio Divizia / Shutterstock.com
Amazon (NASDAQ:AMZN) has impressively evolved from a garage startup to the world’s second-largest company by revenue. A significant part of its 2023 success was achieving the fastest delivery speeds ever, particularly boosting its appeal in the consumables and everyday essentials market.
Impressively, Amazon shows robust growth in its financial performance, notably in the third quarter, with EPS of 94 cents, smashing the 60 cents forecast. The company revenue soared by 12.6% year over year (YOY) to $143.1 billion, beating expectations by $1.54 billion and showcasing its market strength and efficiency.
Furthermore, Amazon is boosting its Prime Video game, bringing in a pro from Walt Disney for its advertising push. Additionally, Amazon has been focused on developing a platform that appeals to businesses for machine learning purposes, creating a workflow pipeline to onboard companies of various sizes. This effort leverages AWS cloud technology to build AI models.
Nvidia (NVDA)
Source: Sergio Photone / Shutterstock.com
Nvidia (NASDAQ:NVDA) is pushing the frontiers of quantum computing with its cuQuantum project, revolutionizing qubit simulation.
Simultaneously, it’s spicing up the AI realm with the Omniverse Cloud, enabling developers to master Isaac AMRs for sophisticated, AI-enhanced robotics. This fusion of high-tech and utility delivers innovation with a snazzy edge.
In the third quarter, Nvidia’s financials were impressive. Their non-GAAP earnings per share soared to $4.02, surpassing estimates by 63 cents. Revenue rocketed to $18.12 billion, up an astonishing 205.6% YOY. Also, data center revenue hit a new high of $14.51 billion, cementing Nvidia’s strong standing in the tech sector.
Furthermore, unveiling the GeForce RTX 4090D GPU in China gave Nvidia’s stock an additional boost. Analyst Vivek Arya, holding a confident $700 price target, forecasts the company will generate an impressive $100 billion incremental free cash flow over 2024 and 2025. Nvidia is not just playing in the tech arena; it’s setting new benchmarks, making it a standout choice for investors.
Advanced Micro Devices
Source: Pamela Marciano / Shutterstock.com
Advanced Micro Devices (NASDAQ:AMD), with a market capitalization of 244 billion, solidifies its prominent status in the semiconductor sector. Endorsed by investment firm UBS alongside Micron Technology (NASDAQ:MU) for 2024, AMD’s robust market presence and growth prospects are recognized, signaling a promising future.
Financially, In the third quarter, AMD’s non-GAAP earnings per share reached 70 cents, exceeding estimates by 2 cents. Revenue rose to $5.8 billion, a 4.1% increase from last year, beating expectations by $110 million. Particularly, client segment revenue, driven by robust Ryzen mobile processor sales, soared to $1.5 billion, up 42% YOY.
Moreover, AMD isn’t just riding the wave. It’s making its own with the MI300 chips, poised as rivals to Nvidia’s H100. This strategic move has attracted tech giants like Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT), who are lining up for AMD’s innovative chips. In the high-stakes semiconductor game, AMD is not just playing. It’s setting the pace.
On the date of publication, Muslim Farooque 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.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post The 3 Best Machine Learning Stocks to Buy in January 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The artificial intelligence (AI) boom shows no signs of cooling, creating significant opportunity for AI stocks. First, we have to consider tech heavyweights that are investing billions into it. Next, analysts at Next Move Strategy Consulting say the AI market, currently valued at about $100 billion, could grow twenty-fold by 2030 to more than $2 trillion.
Finally, according to analysts at UBS, “If the launch of the ChatGPT application is the iPhone moment for the AI industry, the recent rollouts of numerous applications like copilots and features like Turbo and vision from OpenAI in 4Q23 mean the App Store moment for the AI industry has arrived, in our view,” as noted by Business Insider.
Therefore, some of the top AI stocks are trading at a temporary discount. So, let’s explore them next.
Advanced Micro Devices (AMD)
Source: JHVEPhoto / Shutterstock.com
Considering recent weakness in AI stocks, Advanced Micro Devices (NASDAQ:AMD) is an opportunity.
For one, it’s technically attractive. After slipping from about $150 to $133, the tech stock appears to have caught strong support. From its current price of $138.58, I’d like to see it initially retest $150, and eventually run to $200.
Also, AMD is a massive player in the AI market, especially with its new MI300X accelerator chip. That is expected to generate about $2 billion in revenue this year. Further, high-demand for AI chips should fuel a greater significant upside in tech stocks, like AMD.
Even better, UBS analysts still have AMD listed as a top pick in the semiconductor space for the year. Also, analysts at Truist raised their price target on AMD to $154 from $98. Mizuho analysts raised their price target to $162 from $130, with a buy rating, as well.
Qualcomm (QCOM)
Source: nikkimeel / Shutterstock.com
Qualcomm (NASDAQ:QCOM) could see higher highs, too.
After running from about $105 to a high of $146.89, QCOM did pull back recently, finding support at $135. From here, I’d like to see it retest that prior high and potentially head back to $150. Also, the company recently unveiled its Snapdragon 7 Gen 3. QCOM notes that its components “deliver across-the-board advancements to ignite on-device AI,” as quoted by Engagdet.com.
Analysts like QCOM at current prices, too. For example, Mizuho just raised its price target to $155 from $140. Also, Bernstein analysts raised their price target to $160 from 145, with an outperform rating.
“Qualcomm is pioneering AI-enabled chip technology, a move set to revolutionize mobile computing,” as noted by Investorplace contributor Muslim Farooque. “Despite earlier challenges from sluggish phone sales and reduced 5G investment, the company’s rebound, backed by solid earnings, signifies market stabilization and resilience.”
Global X Robotics & Artificial Intelligence ETF (BOTZ)
Global X Funds logo. (PRNewsFoto/Global X Funds)
Or, maybe diversification among top AI names is best for you. At less cost, you can always invest in an ETF like the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ).
After slipping from about $28.50 to $26.84, the ETF appears to have caught strong support. In fact, it could rally higher from here. From its current price of $26.84, I’d like to see it initially test $31 a share.
With an expense ratio of 0.69%, the ETF invests in companies that could benefit from increased utilization of robotics and artificial intelligence (AI). And, that includes those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles.
Some of its top holdings include Nvidia (NASDAQ:NVDA) Intuitive Surgical (NASDAQ:ISRG), C3.ai (NYSE:AI), and Upstart (NASDAQ:UPST) to name a few of the top ones.
The nice thing about an ETF, such as BOTZ, is that you’ll pay less for greater exposure. For example, one share of BOTZ will cost you $26.84. If you wanted 100 shares, it’s $2,684. Or, you can buy one share of NVDA for $491, or $49,100 for 100 shares.
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post If You Can Only Buy One AI Stock in January, It Better Be One of These 3 Names appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
By Chuck Mikolajczak
NEW YORK, Jan 8 (Reuters) - The Nasdaq scored its first gain of at least 1% in 2024 on Monday, as a fall in Treasury yields helped lift megacap stocks, while a sharp drop in Boeing shares kept gains on the Dow Industrials in check.
Megacaps advanced, lifting stocks such as Amazon.com AMZN.O which closed up 2.66% and Alphabet GOOGL.O, which rose 2.29%, as Treasury yields fell ahead of readings on inflation and a new supply of government debt this week, with the benchmark 10-year U.S. Treasury yield US10YT=R hitting a low of 3.966% on the session.
In addition, Apple AAPL.O climbed 2.42% after the iPhone maker said its Vision Pro mixed-reality device will be available for sale from Feb. 2 in the United States.
Nvidia NVDA.O surged 6.3% and fellow chipmaker Advanced Micro Devices AMD.O jumped 5.48%, helping to push the Philadelphia SE Semiconductor Index .SOX up 3.28% as it bounced from a 5.8% drop last week, its biggest weekly percentage fall since October 2022.
"This is definitely a yield-driven market for now and investors are trying to discount when and how many rate cuts we will see, the timing and the magnitude of rate cuts," said Bill Merz, head of capital markets research at U.S. Bank Wealth Management in Minneapolis.
"Now we're probably in a more rational place in terms of yields and it's a question of, is the market getting that right and are yields falling for the right reasons or the wrong reasons? And investors have so far taken the view that yields are falling for all the right reasons, that the Fed is navigating what thus far has been a soft landing."
The Dow Jones Industrial Average .DJI rose 216.90 points, or 0.58%, to 37,683.01, the S&P 500 .SPX gained 66.30 points, or 1.41 %, to 4,763.54 and the Nasdaq Composite .IXIC gained 319.70 points, or 2.20%, to 14,843.77.
The gains on the Nasdaq and S&P 500 marked their first daily percentage climbs of more than 1% since Dec. 21 and biggest one-day percentage advances since Nov. 14.
Meanwhile, Boeing BA.N shares plunged 8.03% after the plane maker and U.S. regulators gave the go-ahead on Monday for airlines to inspect jets that were grounded after a panel blew off an Alaska Airlines-operated ALK.N 737 MAX 9 in mid-flight which forced a dramatic landing of the airliner over the weekend.
The S&P 500 energy index .SPNY was the sole decliner among the 11 S&P 500 sectors, falling 1.16% after hitting its lowest level in a month as crude prices sank about 4% after sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output.
On Friday, the benchmark S&P 500 .SPX snapped a nine-week streak of gains, as investors dialed back expectations on the possible aggressiveness of the Federal Reserve in cutting interest rates this year following a mixed bag of economic data on the labor market and services sector.
Atlanta Fed President Raphael Bostic said on Monday that the central bank's dual goals of lowering inflation and maintaining low unemployment are not yet in conflict.
Money markets now see a 63.8% chance of at least a 25 basis-point (bps) rate cut as soon as March, according to CME's FedWatch Tool, down from 88.5% a week ago.
Investors will eye inflation data this week in the form of the consumer price index (CPI) and producer price index (PPI) to shape expectations for the path of interest rates by the Fed.
Advancing issues outnumbered decliners by a 3-to-1 ratio on the NYSE while on the Nasdaq, advancing issues outnumbered decliners by a 2.3-to-1 ratio.
The S&P 500 posted 13 new 52-week highs and no new lows while the Nasdaq recorded 101 new highs and 92 new lows.
(Reporting by Chuck Mikolajczak in New York Editing by Matthew Lewis)
((charles.mikolajczak@tr.com; @ChuckMik;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
By Chuck Mikolajczak
NEW YORK, Jan 8 (Reuters) - The Nasdaq closed with a gain of at least 1% for the first time in 2024 on Monday, as a fall in Treasury yields helped lift megacap stocks, while a sharp drop in Boeing shares kept gains on the Dow Industrials in check.
Megacaps such as Amazon.com AMZN.O and Alphabet GOOGL.O gained as Treasury yields fell ahead of readings on inflation and a new supply of government debt this week, with the benchmark 10-year U.S. Treasury yield US10YT=R hitting a low of 3.966% on the session.
In addition, Apple AAPL.O also advanced after the iPhone maker said its Vision Pro mixed-reality device will be available for sale from Feb. 2 in the United States.
Chipmakers Nvidia NVDA.O and Advanced Micro Devices AMD.O surged and the Philadelphia SE Semiconductor Index .SOX ended up around 3% after dropping 5.8% last week, its biggest weekly percentage fall since October 2022.
"This is definitely a yield-driven market for now and investors are trying to discount when and how many rate cuts we will see, the timing and the magnitude of rate cuts," said Bill Merz, head of capital markets research at U.S. Bank Wealth Management in Minneapolis.
"Now we're probably in a more rational place in terms of yields and it's a question of, is the market getting that right and are yields falling for the right reasons or the wrong reasons? And investors have so far taken the view that yields are falling for all the right reasons, that the Fed is navigating what thus far has been a soft landing."
According to preliminary data, the S&P 500 .SPX gained 66.19 points, or 1.41%, to end at 4,763.51 points, while the Nasdaq Composite .IXIC gained 319.70 points, or 2.20%, to 14,843.77. The Dow Jones Industrial Average .DJI rose 216.44 points, or 0.58%, to 37,682.55.
The S&P 500 energy index .SPNY was the sole decliner among the 11 S&P 500 sectors after hitting its lowest level in a month as crude prices sank about 4% after sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output.
On Friday, the benchmark S&P 500 .SPX snapped a nine-week streak of gains, as investors dialed back expectations on how aggressive the Federal Reserve would be in cutting interest rates this year following a mixed bag of economic data on the labor market and services sector.
Atlanta Fed President Raphael Bostic said on Monday that the central bank's dual goals of lowering inflation and maintaining low unemployment are not yet in conflict.
Money markets now see a 63.8% chance of at least a 25 basis-point (bps) rate cut as soon as March, according to CME's FedWatch Tool, down from 88.5% a week ago.
Investors will eye inflation data this week in the form of the consumer price index (CPI) and producer price index (PPI) to shape expectations for the path of interest rates by the Fed.
(Reporting by Chuck Mikolajczak in New York Editing by Matthew Lewis)
((charles.mikolajczak@tr.com; @ChuckMik;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
Hype around artificial intelligence (AI) rocked the markets in 2023, sending the tech-heavy Nasdaq soaring more than 40%.
The megacap Magnificent Seven stocks were at the epicenter of AI mania, and perhaps their most influential member is semiconductor manufacturer Nvidia (NASDAQ: NVDA). The company saw its market cap balloon in 2023, and it joined Apple, Microsoft, Amazon, and Alphabet in the exclusive $1 trillion market-cap club.
It's no surprise that Wall Street analyst Dan Ives of Wedbush Securities crowned Nvidia as the godfather of AI.
After surging 237% last year, some might think now is the time for profit taking. But what if I told you that Nvidia stock could be undervalued?
Let's explore how the company is leading the charge in AI, and why now might be as good a time as ever to scoop up some shares.
Demand is off the charts
Nvidia has developed a host of graphics processing units (GPUs). The bedrocks of its GPU line are the A100 and H100 chips, the latter of which is experiencing unprecedented demand.
NVDA revenue (quarterly) data by YCharts.
The chart above illustrates Nvidia's quarterly revenue during the past decade. The big takeaway is that the slope of the line really steepens starting in 2023.
For the third quarter of the company's fiscal 2024, ended Oct. 29, Nvidia reported a record $18.1 billion in revenue, an increase of more than 200% year over year. Moreover, the company's profit increased nearly 500% through the first three quarters of its fiscal year.
If this wasn't enough to get your attention, consider that Wall Street is forecasting revenue to rise 54% this fiscal year, followed by another 20% the year after. Although this technically shows decelerating revenue, I'd say that is appropriate.
It's unrealistic for investors to expect triple-digit percentage revenue growth in perpetuity. Moreover, while Nvidia dominates the AI application market for data center GPUs, there are other competitors gaining steam.
NVDA revenue estimates for current fiscal year, data by YCharts.
With 2024 looking like another milestone year for Nvidia, investors might be wondering how attractive the stock is from a valuation perspective.
Image Source: Getty Images
Nvidia's valuation looks tempting
As of the time of this writing, the stock trades at a forward price-to-earnings (P/E) multiple of 24.8. By comparison, the company's top competitor, Advanced Micro Devices, trades at a forward P/E of 37.
While AMD is making progress of its own, it is far behind Nvidia. Considering Nvidia's growth relative to AMD, fueled by its dominant market share in AI data center GPUs, the disparity between valuation multiples is a head-scratcher.
On top of that, the forward P/E of the S&P 500 is 21.7 -- not too far behind Nvidia. Given the company's stellar performance in 2023 and its strong outlook for this year, it's hard to see why Nvidia doesn't carry a higher premium.
My hunch is that investors are acting with more emotion than logic when it comes to Nvidia. The stock's performance throughout 2023 and the company's admission to the $1 trillion market-cap club might give off vibes of an expensive stock. However, the multiples above could suggest that Nvidia is growing into its valuation, and the stock could actually be cheap.
I think Nvidia will continue to benefit from the secular tailwinds of AI, and now looks like a terrific time to begin dollar-cost averaging into a long-term position at a bargain.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
Fintel reports that on January 8, 2024, Melius Research upgraded their outlook for Advanced Micro Devices (NasdaqGS:AMD) from Hold to Buy .
Analyst Price Forecast Suggests 2.54% Downside
As of December 16, 2023, the average one-year price target for Advanced Micro Devices is 135.06. The forecasts range from a low of 60.60 to a high of $210.00. The average price target represents a decrease of 2.54% from its latest reported closing price of 138.58.
See our leaderboard of companies with the largest price target upside.
The projected annual revenue for Advanced Micro Devices is 28,980MM, an increase of 31.07%. The projected annual non-GAAP EPS is 4.82.
For more in-depth coverage of Advanced Micro Devices, view the free, crowd-sourced company research report on Finpedia.
What is the Fund Sentiment?
There are 3294 funds or institutions reporting positions in Advanced Micro Devices. This is an increase of 33 owner(s) or 1.01% in the last quarter. Average portfolio weight of all funds dedicated to AMD is 0.66%, a decrease of 3.37%. Total shares owned by institutions decreased in the last three months by 1.48% to 1,220,092K shares.
The put/call ratio of AMD is 1.07, indicating a bearish outlook.
What are Other Shareholders Doing?
VTSMX - Vanguard Total Stock Market Index Fund Investor Shares holds 50,297K shares representing 3.11% ownership of the company. In it's prior filing, the firm reported owning 50,219K shares, representing an increase of 0.15%. The firm decreased its portfolio allocation in AMD by 6.17% over the last quarter.
VFINX - Vanguard 500 Index Fund Investor Shares holds 38,824K shares representing 2.40% ownership of the company. In it's prior filing, the firm reported owning 38,342K shares, representing an increase of 1.24%. The firm decreased its portfolio allocation in AMD by 6.42% over the last quarter.
Jpmorgan Chase holds 35,810K shares representing 2.22% ownership of the company. In it's prior filing, the firm reported owning 32,605K shares, representing an increase of 8.95%. The firm increased its portfolio allocation in AMD by 0.66% over the last quarter.
Geode Capital Management holds 31,104K shares representing 1.93% ownership of the company. In it's prior filing, the firm reported owning 30,401K shares, representing an increase of 2.26%. The firm decreased its portfolio allocation in AMD by 6.35% over the last quarter.
Fisher Asset Management holds 27,768K shares representing 1.72% ownership of the company. In it's prior filing, the firm reported owning 26,970K shares, representing an increase of 2.87%. The firm decreased its portfolio allocation in AMD by 4.66% over the last quarter.
Advanced Micro Devices Background Information
(This description is provided by the company.)
For more than 50 years, AMD has driven innovation in high-performance computing, graphics and visualization technologies - the building blocks for gaming, immersive platforms and the data center. Hundreds of millions of consumers, leading Fortune 500 businesses and cutting-edge scientific research facilities around the world rely on AMD technology daily to improve how they live, work and play. AMD employees around the world are focused on building great products that push the boundaries of what is possible.
Fintel is one of the most comprehensive investing research platforms available to individual investors, traders, financial advisors, and small hedge funds.
Our data covers the world, and includes fundamentals, analyst reports, ownership data and fund sentiment, options sentiment, insider trading, options flow, unusual options trades, and much more. Additionally, our exclusive stock picks are powered by advanced, backtested quantitative models for improved profits.
Click to Learn More
This story originally appeared on Fintel.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
After a rocky start to the year, semiconductor stocks are turning around in a big way on Monday.
During the first week of 2024, some of the world's most famous semiconductor companies -- Taiwan Semiconductor Manufacturing Company (NYSE: TSM), Intel (NASDAQ: INTC), and Advanced Micro Devices (NASDAQ: AMD) -- declined in the wake of December's Santa Claus rally.
As the stock market started to find its footing in the second week, however, shares of all three of these companies flipped from sinking to rising. As of 12:05 p.m. ET, TSMC shares were up 2.9%, Intel stock was up a solid 3.4%, and AMD was doing the best of all with a 5.1% gain.
You can probably thank President Joe Biden for that.
Bad news for China is good news for everyone else
By now, you've certainly heard about the Biden administration's plans to curtail China's access to some of the most advanced chips available to support artificial intelligence functions. That section of the market is dominated by Nvidia (NASDAQ: NVDA), which has been feeling the lion's share of the impact from export restrictions on those types of chips. Other companies have been little affected.
However, The Wall Street Journal reported Monday morning that the Biden administration is now shifting its attention to less advanced, older-generation computer chips used in industries other than AI -- in consumer electronics, military weapons, and cars, for example. These kinds of semiconductor chips are more likely to be produced in and exported from China rather than imported into China. Indeed, as the WSJ article highlights, China is downright dominant in this segment of the semiconductor industry -- and President Biden wants to do something about that.
Meanwhile, worrying that China might leverage its dominant position in lower-end chips to punish the U.S. in a future trade war, Congress has been urging the Commerce Department and U.S. Trade Representative (USTR) to take steps to protect the supply chain for these chips by awarding subsidies to expand domestic semiconductor production on the one hand and imposing tariffs on chips imported from China on the other.
What this means for Intel, Taiwan Semi, and AMD
This effort is still in its early days, but already, the WSJ notes that the Commerce Department has awarded $162 million in subsidies to help Microchip Technology expand production of microcontrollers for cars and appliances. The Commerce Department is also said to be putting together a list of other U.S. companies that might receive government support to counter China's rapidly growing industry producing lower-end chips.
Don't get too excited just yet. While Intel, Taiwan Semi, and AMD stocks are all rising on Monday's news, there's no guarantee that any of these companies will end up getting subsidies directly aimed at supporting their lower-end chip production. To the contrary, semiconductor companies like Marvell, Texas Instruments, and Microchip all spring to mind more readily when one thinks of lower-end chips. And all of those stocks are rising Monday, too.
That said, if you did want to place a bet on one of the high-profile chipmakers named above based on this newest effort to subsidize domestic chip production, Taiwan Semiconductor looks like the safest bet to make. Trading at less than 16 times forward earnings, it's significantly cheaper than Intel at 26 times forward earnings -- and less than half the price of AMD at 37 times forward earnings. TSMC is also trading at a cheaper valuation than Marvell, TI, or Microchip.
Strange as it may be to say it, Taiwan Semiconductor may end up being the biggest beneficiary of all if the U.S. trade war in semiconductor chips continues.
Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?
Before you buy stock in Taiwan Semiconductor Manufacturing, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Taiwan Semiconductor Manufacturing wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of January 8, 2024
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, Taiwan Semiconductor Manufacturing, and Texas Instruments. The Motley Fool recommends Intel and Marvell Technology and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
By Johann M Cherian and Ankika Biswas
Jan 8 (Reuters) - Tech-laden Nasdaq jumped more than 1% to a near one-week high on Monday, boosted by a rebound in megacaps and chip stocks, while blue-chip index Dow slipped to a fresh two-week low as Boeing shares tanked following the grounding of some its jets.
Megacaps like Amazon.com AMZN.O and Alphabet GOOGL.O gained over 1%, while AppleAAPL.O climbed 1.4% after saying its Vision Pro mixed-reality device will be available for sale from Feb. 2 in the United States.
Chipmakers Nvidia NVDA.O and Advanced Micro Devices AMD.O jumped more than 4% each. The Philadelphia SE Semiconductor Index .SOX rebounded with a 2.6% advance from its worst week since Oct. 2022.
"We do think the gains (in megacaps) will be sustainable after last year's outperformance," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.
"A lot of investors have been drawn to the mega caps because they are profit machines and in good times, they do really well."
Meanwhile, BoeingBA.N slid 6.6% after the U.S. Federal Aviation Administration (FAA) ordered the temporary grounding of some 737 MAX 9 jets fitted with a panel that blew off an Alaska Air Group ALK.N jet in midair on Friday.
The aircraft manufacturer could lose about $10 billion in value if losses hold through market close.
Energy stocks .SPNY led declines among the 11 S&P 500 sectors, dropping by 2.1% to a three-week low as crude prices sank over 4% after sharp price cuts by top exporter Saudi Arabia and a rise in OPEC output. O/R
At 11:47 a.m. ET, the S&P 500 .SPX was up 26.46 points, or 0.56%, at 4,723.70, the Nasdaq Composite .IXIC was up 171.06 points, or 1.18%, at 14,695.14, and the Dow Jones Industrial Average .DJI was down 60.06 points, or 0.16%, at 37,406.05.
On Friday, the benchmark S&P 500 .SPX marked its worst week since late October, after mixed economic data turned investors cautious and prompted them to scale back expectations on when the Federal Reserve could begin rate cuts.
Remarks by Atlanta's Raphael Bostic, a Federal Open Market Committee (FOMC) voting member this year, due at 12:30 p.m. ET, will be parsed for his stance on monetary policy easing. Over the weekend, Dallas' Lorie Logan warned the Fed may need to resume raising its short-term policy rate.
Money markets now see a 69.5% chance of at least a 25-basis-point (bps) rate cut as early as March, down from over 85% in the final weeks of 2023, according to the CME FedWatch Tool.
Investors were also awaiting December consumer and producer inflation reports later in the week and commentary by several policymakers for clues on the Fed's monetary policy trajectory.
JPMorgan Chase JPM.N, Wells Fargo WFC.N, Bank of America BAC.N and Citigroup C.N are set to kick off the quarterly earnings season on Friday. Their shares were down over 1% each.
Advancing issues outnumbered decliners by a 2.22-to-1 ratio on the NYSE and by a 1.70-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and no new lows, while the Nasdaq recorded 50 new highs and 54 new lows.
(Reporting by Johann M Cherian and Ankika Biswas in Bengaluru; Editing by Devika Syamnath)
((johann.mcherian@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
By Johann M Cherian and Ankika Biswas
Jan 8 (Reuters) - Blue-chip index Dow slipped to a fresh two-week low on Monday as Boeing shares nosedived following the grounding of some its jets, while a rebound in megacaps and chip stocks supported the other U.S. stock indexes.
BoeingBA.N slid 9.1% after the U.S. Federal Aviation Administration (FAA) ordered the temporary grounding of some 737 MAX 9 jets fitted with a panel that blew off an Alaska Air Group ALK.N jet in midair on Friday.
The aircraft manufacturer could lose about $13.5 billion in value if losses hold through market close.
"It could impact the airline sector because the 737 (MAX) is a real workhorse of the many airlines fleets," said Kim Forrest, chief investment officer at Bokeh Capital Partners.
"So it's a drag and a real black mark on Boeing and the company has to come out strongly and say how they're fixing this and how it's not going to happen again."
Alaska Air GroupALK.N slumped 3.9% after the carrier canceled more than 200 flights following the FAA order.
On Friday, the benchmark S&P 500 .SPXmarked its worst week since late October, after mixed economic data turned investors cautious and prompted them to scale back expectations on when the Federal Reserve could begin rate cuts.
Remarks by Atlanta's Raphael Bostic, a Federal Open Market Committee (FOMC) voting member this year, due at 12:30 p.m. ET, will be parsed for his stance on monetary policy easing. That comes after Dallas' Lorie Logan warned over the weekend the Fed may need to resume raising its short-term policy rate.
Money markets now see a 64.7% chance of at least a 25-basis-point (bps) rate cut as early as March, down from over 85% in the final weeks of 2023, according to the CME FedWatch Tool.
Investors were also awaiting two December inflation reports later in the week and commentary by several policymakers for clues on the Fed's monetary policy trajectory.
Among the 11 S&P 500 sectors, energy .SPNY led declines with a 2.8% loss as crude prices sank nearly 5%. O/R
At 9:52 a.m. ET, the Dow Jones Industrial Average .DJI was down 185.79 points, or 0.50%, at 37,280.32, the S&P 500 .SPX was up 11.73 points, or 0.25%, at 4,708.97, and the Nasdaq Composite .IXIC was up 104.25 points, or 0.72%, at 14,628.33.
AppleAAPL.O climbed 0.9% after saying its Vision Pro mixed-reality device will be available for sale from Feb. 2 in the United States.
Amazon.com AMZN.O and Alphabet GOOGL.O added 1.1% and 0.5% respectively.
JPMorgan Chase JPM.N, Wells Fargo WFC.N, Bank of America BAC.N and Citigroup C.N lost more than 1% ahead of reporting quarterly earnings on Friday.
Advancing issues outnumbered decliners by a 1.20-to-1 ratio on the NYSE and by a 1.05-to-1 ratio on the Nasdaq.
(Reporting by Johann M Cherian and Ankika Biswas in Bengaluru; Editing by Devika Syamnath)
((johann.mcherian@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-08
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Nvidia (NASDAQ:NVDA) stock surged throughout 2023, but has been sliding as investors take some risk off the table by taking profit. Investors can make prudent moves, but their necessity is questionable. The market may have overreacted to anticipated lower interest rates.
Despite the company’s impressive performance in 2023, there are indications that growth may slow down more than expected. A surface-level assessment may be causing concerns, but a closer look can change your perspective.
NVDA Stock and the Market’s Current Stance
Plenty talk about Nvidia’s outsized impact on the broad market’s performance, but it’s not fully a one-way street. Factors that affect overall market sentiment can make a big impact on NVDA’s price performance. Right now, that would be the uncertainty surrounding the future direction of interest rates.
Still, while macro-related uncertainty is playing a role, arguably, it’s been more company-specific areas of uncertainty having the largest effect NVDA stock. For months, the U.S. government’s crackdown on chip exports to China has affected sentiment for Nvidia. There are concerns about how this crackdown, and the resultant bans, will affect the company’s future growth.
Since last month, Advanced Micro Devices‘ (NASDAQ:AMD) AI chip product launches, plus Intel’s (NASDAQ:INTC) generative AI chip unveiling, have raised concerns related to rising competition and its impact on Nvidia’s growth.
While these China and competition-based concerns haven’t shifted sentiment for NVDA from bullish to bearish, they have clearly made some investors hesitant to buy, and have compelled other investors to exit/pare down positions. Again, though, while the overall market is feeling uneasy, that doesn’t mean you need to follow suit.
There’s Still a Path to New Highs in 2024
As discussed in prior coverage of NVDA stock, China-related concerns shouldn’t scare you away. Nvidia has figured how to both work around and mitigate the impact of the export bans. When it comes to the most recent non-macro concern about NVDA (rising competition), there’s a lot out there that should assuage your concerns.
AMD and Intel could keep making progress (and generate big profits) from capitalizing on the generative AI mega-trend. Still, their success isn’t likely to come at Nvidia’s expensemin the immediate future.
While gaining ground, AMD and Intel remain well behind this AI chip frontrunner. According to Srini Pajjuri of Raymond James, Nvidia is projected to hold an 85% share of the AI accelerator chip market this fiscal year (ending January 2025). Nvidia will meet or surpass growth expectations despite competition.
In fact, given how NVDA trades for only 24.1 times forward consensus estimates for FY2025 earnings ($19.88 per share, up by around 62.3%), merely meeting expectations may be enough to drive the stock to even loftier price levels in 2024. Here’s how.
The Verdict: New Highs Are Well Within Reach
At some point in time, the AI chip market will inevitably mature. However, it’s an understatement to say that moment is years away from arriving. It may just well be decades away from arriving.
In the near-to-medium term, demand for AI accelerators and processors will stay robust and continue to climb. As the dominant name in the space, this points to continued outsized earnings growth for Nvidia.
This leaves the stock poised to move higher, in a big way. Shares will move higher in line with increased earnings, but also (most likely), thanks to multiple expansion.
Once Nvidia shows that it’s not exiting the fast lane just yet, shares could re-rate to a forward earnings multiple in the 30-40 range. With this, hitting $600, $700, or even $800 per share this year isn’t out of reach for NVDA stock.
NVDA stock earns an A rating in Portfolio Grader.
On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The 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.
The post Is NVDA Stock Screeching Out of the Fast Lane? Not Quite! appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-07
|
AMD
|
It's a new year, the best time yet to start investing. After all, compounding does its best work late. The sooner you start, the more wealth you'll build over time.
One of my favorite aspects of investing is that the stock market doesn't discriminate. You can prosper whether you're already well-off or starting with just $500. Everyone can benefit from owning stocks.
Putting pen to paper -- deciding which stocks to own (with thousands to choose from) can be the hardest part of the process. This list is a great reference for those looking for a starting point. Here are five great stocks you can confidently buy for the long term...and $500 will get you at least one share of every stock.
1. Palantir Technologies
Software company Palantir Technologies (NYSE: PLTR) hasn't been around long, but it's already made a name on Wall Street. The company builds specialized software for government and enterprise customers on its proprietary platforms. This software helps analyze data and aid in real-time decision-making. Palantir's technology is helping optimize supply chains, detect financial fraud, run military operations, and more.
PLTR Total Return Price data by YCharts.
The company launched its Artificial Intelligence Platform (AIP) in 2023, a platform for launching artificial intelligence (AI) models. There's already been tremendous demand, which should bode well for Palantir's long-term growth prospects. The stock has outperformed the market since going public, and that could continue if AI is the investing opportunity it appears to be.
2. Advanced Micro Devices
AI requires tremendous computing power, which boils down to the chips that power the computers. Advanced Micro Devices (NASDAQ: AMD) has an enormous growth opportunity ahead, even if rival Nvidia has gotten most of the hype. AMD recently announced a new generation of AI chips it claims can outperform Nvidia's core data center product, its H100 series.
AMD Total Return Price data by YCharts.
AMD's CEO, Lisa Su, believes the AI chip market could hit $400 billion by 2027, setting the company up for solid growth if it can capture a slice of that opportunity. AMD has historically outperformed the broader market as technology advances demand more (and increasingly advanced) chips. Don't overlook AMD as a long-term AI stock.
3. Nike
A common investing tip is to buy what you know. Sports apparel giant Nike (NYSE: NKE) is one of the world's most recognizable brands. Sports are a part of global culture, and the company's success in tying its brand to the sporting world's biggest names has fostered years of market-beating growth. Today, Nike has a $165 billion market cap, so blistering returns may be harder to come by simply because of how big the company is.
NKE Total Return Price data by YCharts.
But don't count the Swoosh out. Nike has evolved, building a blossoming direct-to-consumer business that helps it engage directly with customers and cut out some of the cost of selling through wholesalers. The company's global recognition should help to keep pushing the ball forward in emerging markets like India and China, where consumer spending still has room to grow.
4. Shopify
Most people know that Amazon dominates online shopping in the United States. Shopify (NYSE: SHOP) is helping companies worldwide compete with Amazon. The company's software platform makes it simple for merchants to set up and run an online store. Shopify's users range from single entrepreneurs to corporations. Collectively, $56 billion in transactions flowed through Shopify in Q3, so all those shops add up to big business.
SHOP Total Return Price data by YCharts.
Consumer spending is crucial to the North American economy. In the United States, just 15% of retail is online after decades of growth. In other words, the growth story of e-commerce is nowhere near over. Shopify should continue riding this trend for years, helping millions of businesses compete with the industry's biggest players worldwide.
5. Walt Disney
This stock needs little introduction. The Walt Disney Company (NYSE: DIS) is a media behemoth, home to Disney's collection of intellectual property, including Pixar, Star Wars, Marvel, Disney, ESPN, and more. It's leaned on its media to create theme parks, cruise lines, and merchandise found worldwide. Ironically, despite its fame, it's the only stock on this list that hasn't beaten the broader market over its lifetime.
DIS Total Return Price data by YCharts.
The company began pivoting to streaming, launching Disney+ in 2019. It's been a few challenging years as Disney sought to grow its streaming memberships over making money. With over 100 million households using Disney+, that could begin to change. It's hard not to see Disney's powerful cache of media not creating value for shareholders over the long run.
Should you invest $1,000 in Palantir Technologies right now?
Before you buy stock in Palantir Technologies, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Palantir Technologies wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Justin Pope has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Amazon, Nike, Nvidia, Palantir Technologies, Shopify, and Walt Disney. The Motley Fool recommends the following options: long January 2025 $47.50 calls on Nike. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-07
|
AMD
|
As 2024 begins, there are opportunities and threats across the market. Investors looking to set up their portfolios for success should look at more than what happened in 2023 and instead look at where there's long-term, sustainable business momentum from companies.
In this video, Travis Hoium covers four trends to watch in 2024 and 10 stocks that could outperform the market.
*Stock prices used were end-of-day prices of Jan. 5, 2023. The video was published on Jan. 5, 2024.
Should you invest $1,000 in Spotify Technology right now?
Before you buy stock in Spotify Technology, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Spotify Technology wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Travis Hoium has positions in Airbnb, Alphabet, General Motors, MGM Resorts International, On Holding, Peloton Interactive, Portillo's, Spotify Technology, Verizon Communications, and Zillow Group. The Motley Fool has positions in and recommends Advanced Micro Devices, Airbnb, Alphabet, Amazon, Meta Platforms, Microsoft, Netflix, Nvidia, Peloton Interactive, Spotify Technology, Tesla, and Zillow Group. The Motley Fool recommends General Motors and Verizon Communications and recommends the following options: long January 2025 $25 calls on General Motors. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-07
|
AMD
|
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum and price momentum.
ADVANCED MICRO DEVICES, INC. (AMD) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
FUNDAMENTAL MOMENTUM: PASS
TWELVE MINUS ONE MOMENTUM: PASS
FINAL RANK: PASS
Detailed Analysis of ADVANCED MICRO DEVICES, INC.
AMD Guru Analysis
AMD Fundamental Analysis
More Information on Dashan Huang
Dashan Huang Portfolio
About Dashan Huang: Dashan Huang is an Assistant Professor of Finance at the Lee Kong Chian School of Business at Singapore Management University. His paper "Twin Momentum" looked at combining traditional price momentum with improving fundamentals to generate market outperformance. In the paper, he identified seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that he combined into a single fundamental momentum measure. He showed that stocks in the top 20% of the universe according to that measure outperformed the market going forward. When he combined that measure with price momentum, he was able to double its outperformance.
Additional Research Links
Top NASDAQ 100 Stocks
Top Technology Stocks
Top Large-Cap Growth Stocks
High Momentum Stocks
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-06
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Over the past year, four stocks with a market capitalization of $200 billion or more (out of 44) had a triple-digit return. Advanced Micro Devices (NASDAQ:AMD) stock was one of them, up 114.2% according to Finviz.com.
The others are Nvidia (NASDAQ:NVDA), Meta Platforms (NASDAQ:META), and Tesla (NASDAQ:TSLA), up 237.5%, 178.3%, and 122.1%, respectively.
That’s some exclusive company. Care to guess how many of the 44 were down over the past year? Just nine. The worst performer of those in negative territory was Chevron (NYSE:CVX), down 13.1%.
How will AMD stock do in 2024? As long as artificial intelligence doesn’t go off the rails like cannabis stocks and crypto have over the past year, I think it will do just fine this year. AMD stock may not see a three-digit increase, but at least a 20-30% rise by Dec. 31.
These three things ought to keep Advanced Micro Devices moving higher in 2024.
Free Cash Flow and AMD Stock
In July 2019, I wrote an article entitled Free Cash Flow Is the Key to Whether or Not Nvidia Stock Is a Buy. In it, I argued that Nvidia’s significant advantage over AMD was its free cash flow (FCF) generation.
I expected its fiscal 202o free cash flow to be nearly $3 billion at the time. Meanwhile, AMD’s trailing 12-month free cash flow was -$251 million.
“I love companies that generate free cash flow. It’s even better if they can grow FCF by double digits over the long haul. Those that can see their stock prices go higher over time; those that can’t see their stock prices go lower. It’s that simple,” I wrote on July 18, 2019.
Fast forward to 2024.
AMD’s TTM FCF through Q3 2023 was $1.32 billion. While down from $3.12 billion in 2022, it was still very positive, a far cry from the FCF it used in 2019. Of course, it still pales compared to Nvidia’s TTM FCF of $17.52 billion.
The company’s FCF has dropped in the past year as AMD has accelerated its AI investments to meet and beat (well, at least try to) Nvidia’s efforts in this area. So far, this hasn’t translated into cash flow like it has for NVDA.
That should change in 2024.
The MI300X Could Be Nvidia’s Kryptonite
Don’t get me wrong, I’m a big fan of Nvidia and its CEO, Jensen Huang. At the end of November, I suggested that if investors could swing it, they should buy both AMD and NVDA.
My rationale was simple. While Nvidia is the two-ton elephant of AI, AMD has moved incredibly quickly to steal some of its thunder, including hiring a top supercomputing expert to take the competition to Huang and company.
Earlier in November, I discussed how AMD’s MI300X GPU (graphics processing unit) is one of the best products ever developed, according to CEO Lisa Su. If it can capture 30% of the AI market (leaving 70% for Nvidia), AMD shareholders will still make out like bandits.
Su said last June, when it announced the GPU would start shipping later in 2023 (now early in 2024), that the MI300X has 60% more memory than Nvidia’s H100.
“What this performance does is it just directly translates into a better user experience,” CNBC reported Su’s Dec. 6 comments. “When you ask a model something, you’d like it to come back faster, especially as responses get more complicated.”
That’s not enough to knock Nvidia off its perch, but it’s a start, especially if it can sell its AI chip for less than $40,000, the price for one Nvidia chip. Meta, OpenAI, and Microsoft (NASDAQ:MSFT) have all said they will use the M1300X as an alternative to Nvidia’s products.
It’s early days, but AMD will likely surprise many people in the tech industry with the success of the MI300X GPU.
On the date of publication, Will Ashworth 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.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post Charting the Course for AMD Stock: After a 114% Rise, What’s Next in 2024? appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-06
|
AMD
|
The technology-heavy Nasdaq Composite gained some 43% in 2023. And investors are hopeful it will rally further as excitement continues to increase around generative artificial intelligence (AI) technologies. Expectations about interest rate cuts should also push up the Nasdaq in 2024.
Against this backdrop, it makes sense for retail investors to consider picking up small stakes in high-quality blue chip stocks that are already riding robust secular tailwinds ahead of this potential rally. Here's why Microsoft (NASDAQ: MSFT) and Advanced Micro Devices (NASDAQ: AMD) fit the bill.
Microsoft
For a long time, Microsoft has been widely famous for its Windows operating system and its Microsoft Office productivity suite. But lately, the company has also become famous for its Azure cloud computing platform and $13 billion investment in OpenAI (developer of the famous chatbot ChatGPT).
Microsoft Azure's cloud computing business has been rapidly expanding its market share. Azure accounted for a 25% share of global spending on cloud infrastructure services in the third quarter (ended Sept. 30), up from 22% in the same quarter of the prior year.
With a global cloud footprint of nearly 60 data center regions and a robust AI infrastructure capable of training and running large language models in real time, Azure has become a major growth catalyst for Microsoft.
Its office productivity business is also showing improvement. While the licensing portion of the business is struggling, enterprises are increasingly opting for cloud-based Microsoft 365 subscriptions.
Besides popular applications such as Office, PowerPoint, and Excel, companies are also using premium offerings in cybersecurity, analytics, voice, and compliance through Microsoft 365 subscriptions. The Office 365 business saw robust expansion and a rise in average revenue per user (ARPU).
The company also expects Microsoft 365 Copilot, an AI assistant integrated into several of the company's offerings such as Office, Outlook, and GitHub, to attract new paid customers and contribute significant revenue in the coming years.
Considering these tailwinds, Microsoft seems to be a compelling pick for 2024.
Advanced Micro Devices
After rallying nearly 120% in 2023, shares of semiconductor company Advanced Micro Devices have declined by around 6% in 2024. This was based on news of the Dutch government partly revoking ASML Holdings' export license for shipping some lithography machines to China.
It seems that the semiconductor companies fear the possibility of the Chinese government retaliating by restricting the export of certain metals. While this worry cannot be ignored, there are several reasons to like the stock.
First, AMD's EPYC server processors have been a major beneficiary of the rising demand for high-performance computing at data centers. With organizations increasingly migrating to the cloud, there has been growing demand for high-performance and cost-effective third-generation and fourth-generation EPYC processors.
Subsequently, AMD's server chips have captured over a 50% share in the North American hyperscaler market.
Second, AMD's server chips currently have a mid-teens share in the enterprise market. But with partners such as Hewlett Packard Enterprise, Dell Technologies, and Super Micro Computer expanding their portfolio of AMD products, the company expects more from the enterprise segment in the coming years.
Third, AMD expects the data-center AI accelerator market to reach over $400 billion by 2027. To capitalize on this opportunity, the company has launched the MI300 family of chips optimized for AI workloads.
The MI300 is competitive with Nvidia's H100 chip in training large language models, but it could prove even better with large language models (running them in a real-time environment) due to its high memory bandwidth. Hence, AMD expects MI300 revenue to surpass $2 billion in fiscal 2024 and is working to ensure a sufficient supply of these chips.
Lastly, AMD's investments in developing its software and ecosystem have also helped drive the adoption of its hardware. The company has made strategic acquisitions such as Mipsology and Nod.ai to further enhance its AI software.
So even though AMD's current valuation of 9.5 times sales is higher than its three-year average of 8, investors can consider paying this premium to get a piece of the action in this solid growth stock.
Should you invest $1,000 in Microsoft right now?
Before you buy stock in Microsoft, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Microsoft wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Manali Bhade has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Microsoft, and Nvidia. The Motley Fool recommends Super Micro Computer. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-05
|
AMD
|
To say that 2023 was a good year for semiconductor stocks is an understatement. The sector, at least as defined by the VanEck Semiconductor ETF (NASDAQ: SMH), rocketed 73.4% in 2023! So if you had shied away from this volatile yet important part of the market, you likely missed out on some of the biggest gains of the year.
The artificial intelligence (AI) revolution no doubt played a big part, causing some of the largest names like Nvidia and Advanced Micro Devices to rise 239% and 128%, respectively.
But there are other, really important chip companies with strong business models and important long-term growth trends that lagged the sector. On that note, the following three stocks still look like bargain-priced options in the red-hot sector today.
SMH Year to Date Total Returns (Daily) data by YCharts.
Taiwan Semiconductor Manufacturing
The world's largest chip foundry Taiwan Semiconductor Manufacturing (NYSE: TSM) was up "only" 42.3% in 2023, including its 1.9% dividend. But that left the stock only trading around 18 times trailing earnings and under 16 times this year's earnings estimates.
That's certainly a more-than-reasonable price to pay for the world's largest foundry that makes basically all of the world's most important chips, from Nvidia's H100 accelerators to AMD's Instinct MI300 to Apple's M-series laptop and A-series mobile processors.
2023 was a down year for many key semiconductor markets, including both PCs and smartphones, which are still the largest chip end markets today. Investors became disappointed in TSMC's results mid-year after second-quarter earnings when management revealed that AI chips made by Nvidia only made up a mid-single-digit percentage of the overall industry. Given how huge Nvidia's growth was last year, that appeared to surprise some investors, who may have been hoping for a bigger AI surge for TSMC.
But TSMC stock clawed its way back toward the end of the year when growth surprised to the upside. In its Q2 earnings call with analysts, TSMC management revised down prior guidance for the year, anticipating revenue would fall around 10% for the year.
However, things turned out much better than anticipated, as AI demand remained very strong while other key markets started to turn around. TSMC releases its monthly revenue, and through November, its 11-month revenue was only 4.1% below that of 2022 -- much better than the anticipated 10% decline.
Eventually, all of those laptops and smartphones bought during the 2020 to 2021 pandemic period will have to be replaced, likely by higher-end chips for AI PCs and other advanced machines. Furthermore, AMD's CEO Lisa Su just increased her outlook for the AI chip market to $400 billion by 2027, up from her June prediction of just $150 billion.
While TSMC said it expects AI chips to grow from a mid-single-digit percentage of its revenue to a mid-teens percentage over time, that is probably conservative. With a larger AI market growing very fast as other markets are turning around, look for TSMC to post strong growth in the year ahead.
On Semiconductor
The electric vehicle (EV) market is projected for long-term growth, especially as technology improves and costs come down. But 2023 saw a slowdown in the market, causing many EV-related stocks to plunge in Q2 and Q3, like silicon carbide leader On Semiconductor (NASDAQ: ON).
This year, the supply chain shortages that plagued the industry in 2021 and 2022 were alleviated, leading to ample supply. Meanwhile, higher interest rates dampened demand for EVs, which tend to be a bit pricier than the typical internal combustion engine (ICE). A late summer report showed that EV inventories were piling up at dealerships in the U.S., with some major automakers saying they would slow their battery and EV manufacturing plans.
Those fears appeared justified when On reported Q3 earnings, during which it guided for a soft Q4. On is currently a leader in silicon carbide power chips, a difficult-to-manufacture semiconductor alloy that is especially useful in high-power applications, like electric vehicles and infrastructure. The company blamed the slowdown on a very large European customer that had paused some orders, which isn't surprising given the news about slower adoption of certain EV models.
But fears that EVs have exhausted early adopters may be misplaced. After all, despite the slowdown, EVs are still growing faster than ICE cars in the U.S., Europe, and China -- just not as fast as some more bullish observers may have anticipated. And as interest rates moderate and charging infrastructure improves, customer adoption should eventually be there.
So near-term fears may have opened up an opportunity for longer-term investors in On. After all, the stock only trades at less than 16 times earnings. Moreover, the company is set to improve margins as it brings its new 300mm East Fishkill plant up to speed, so there is also a self-help, margin-improvement story here as well.
Image source: Getty Images.
Kulicke and Soffa
The AI revolution has put a big focus on whichever chipmaker can produce the fastest and most power-efficient chip at the most advanced node. But investors shouldn't ignore chip-packaging companies either, such as industry leader Kulicke and Soffa (NASDAQ: KLIC). These types of companies are somewhat less sexy and use more commoditized machines that connect chips together on a motherboard or even to each other, usually through copper wires or small copper "bumps."
But as chips become more complex, a greater focus will come on packaging. This is especially true as power and electricity concerns come to the fore, since more powerful chips require more electricity and generate more heat. AI chipmakers are even beginning to construct chips made of "chiplets," which are optimized pieces of silicon stitched together, with new, advanced packaging technologies, into "superchips." For instance, AMD's MI300 is made out of 13 different chiplets.
Kulicke and Soffa has a dominant market position in "legacy" ball bonder packaging equipment, demand for which fluctuates with cycles. But it has smaller revenue segments in newer up-and-coming technologies, such as thermocompression bonding for chiplets, EV battery packaging, and microLEDs -- a new kind of advanced screen that is currently in high-end electronics but could one day eventually spread to smartphones.
Not unlike TSMC, Kulicke's mature business in ball bonding is in a downcycle, causing a massive decline in earnings over the past year, from $7.09 in 2022 to just $0.99 in 2023. But if those are the two extremes, one could argue Kulicke's average earnings power is around $4 per share. With the stock at just $51.50 with nearly $13.40 in cash on the balance sheet with no debt, the company's enterprise value (around $38 per share) to average earnings ($4) would be under 10.
That's a cheap stock no matter which way you cut it, making Kulicke and Soffa an under-the radar pick in 2024.
Should you invest $1,000 in Taiwan Semiconductor Manufacturing right now?
Before you buy stock in Taiwan Semiconductor Manufacturing, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Taiwan Semiconductor Manufacturing wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Billy Duberstein has positions in Apple, Kulicke And Soffa Industries, and Taiwan Semiconductor Manufacturing. His clients may own shares of the companies mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends ON Semiconductor. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-05
|
AMD
|
Shares of Advanced Micro Devices (NASDAQ: AMD) were surging last month after investors responded positively to the launch of its new Instinct MI300 accelerators designed to run advanced artificial intelligence (AI) models. The launch had been long anticipated by investors.
AMD stock also benefited from broader market gains during the month, partly in response to the Fed's forecast of lower interest rates in 2024. According to data from S&P Global Market Intelligence, the stock gained 22% in December.
As you can see from the chart below, AMD spiked 10% on Dec. 7 after its chip presentation and continued to rise from there.
AMD data by YCharts.
AMD responds in AI
Rival Nvidia has dominated the market thus far for AI chips and components, only increasing the anticipation for the new MI300 and the rest of AMD's new product line. There's a shortage of Nvidia's H100 accelerators and other graphics processing units (GPUs), meaning there's a clear opportunity for AMD to step in.
AMD said the new MI300X accelerator offers industry-leading memory bandwidth for generative AI and top performance for large language model training and inference. AMD also projected that the new line of chips would generate $2 billion in revenue in 2024, which would significantly boost its data center business.
The company also showed off customers, including Microsoft, Meta Platforms, OpenAI, and Oracle, showing a solid customer base for the new product line. Later in the month, there was little company-specific news on AMD, but the stock seemed to benefit from the broader gains in the morning as the Fed forecast lower rates next year.
AMD also seemed to get a boost from better-than-expected results from Micron, the memory-chip maker considered a bellwether for the broader semiconductor market. Micron reported a return to revenue growth, though it still had a wide loss on the bottom line.
What's next for AMD in 2024
High expectations are baked into AMD's stock after shares more than doubled in 2023, and the $2 billion revenue forecast from the new MI300 shows that alone will only have a modest impact on the company's financial results. The semiconductor sector has been in a slump in the last year or two, and AMD reported just 4% revenue growth in its most recent quarter, but demand for its CPUs seems to be recovering as well.
Given the surge in demand for AI chips and the current shortage, AMD should find a niche to fill and remain a popular choice for tech investors.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Meta Platforms. The Motley Fool has positions in and recommends Advanced Micro Devices, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-05
|
AMD
|
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the The Technology Select Sector SPDR Fund (Symbol: XLK) where we have detected an approximate $239.3 million dollar outflow -- that's a 0.4% decrease week over week (from 304,210,000 to 302,910,000). Among the largest underlying components of XLK, in trading today Advanced Micro Devices Inc (Symbol: AMD) is up about 2.7%, Accenture plc (Symbol: ACN) is up about 0.3%, and Cisco Systems Inc (Symbol: CSCO) is up by about 0.2%. For a complete list of holdings, visit the XLK Holdings page » The chart below shows the one year price performance of XLK, versus its 200 day moving average:
Looking at the chart above, XLK's low point in its 52 week range is $120.81 per share, with $193.72 as the 52 week high point — that compares with a last trade of $185.23. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs experienced notable outflows »
Also see:
Top Dividend Stocks
DHY Videos
Funds Holding DPU
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-05
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The year 2023 was a great one for the stock market. The Dow Jones Industrial Average rose 14% to finish the year at a record high. The benchmark S&P 500 index gained 25% and came within a whisker of a record close. And the technology-focused Nasdaq index increased 43% to register its best year since the internet rally of 1999. So, what can we expect in 2024? How will the markets perform in the year ahead? It’s still very early days, but already we are seeing some trends and shifts take hold in the market. The winners and losers of the past year could change in the coming months as investor preferences shift and sentiment takes a different turn. Interest rate cuts, wars in foreign lands, and a potential global recession could each influence markets over the next 12 months. As the New Year begins, we offer 2023 in review: key stock trends and sector shifts unveiled.
Bank Stocks Are Hot Again
As soon as Fed Chair Jerome Powell announced that three interest rate cuts are likely in 2024, the sun began to shine on bank stocks. Despite their earnings holding up well, bank stocks, as a group, had a miserable 2023. The S&P Banks Index has registered a measly 2% return over the last 12 months, compared to a 25% gain in the benchmark S&P 500 index. And that small gain in the banking index was achieved after Powell announced the potential rate cuts in December.
Of course, things really got ugly for all bank stocks after the failures of several regional lenders last spring, including Silicon Valley Bank (OTCMKTS:SIVBQ) and Signature Bank (OTCMKTS:SBNY). However, investors and traders are now putting capital back into bank stocks, with interest rates having now peaked and likely to decline in the coming months. Since the start of the fourth quarter of 2023 last October, the S&P Banks Index has climbed 30% higher and turned positive, with most of that increase occurring in the last month.
Influential bank stocks such as JPMorgan Chase (NYSE:JPM) and Bank of America (NYSE:BAC) are each up 10% since the start of December.
BioTech Is Having A Moment
Another beneficiary of the expected rate cuts this year appears to be biotech stocks. The equal-weighted SPDR S&P Biotech ETF (NYSEARCA:XBI) has risen 38% since the broader market began to rally at the end of October. The gain is a major reversal for the biotech sector. Before Halloween, the biotech ETF was down 20% on the year. But now, biotech stocks are rallying again as the prospect of lower interest rates comes into view.
This makes sense as most biotech stocks, the majority of which are small start-ups, rely on borrowed capital to fund their operations and drug research. In addition to the overall rally among biotech stocks, there has also been a fresh wave of mergers and acquisitions among biotech companies over the last two months. And there are reports that biotech executives are buying up company shares as the stocks rally, providing a further boost of confidence for the sector.
On the first trading day of 2024, as the technology-laden Nasdaq index suffered its worst performance since last October, shares of biopharmaceutical company Moderna (NASDAQ:MRNA) rose 13% on news of an analyst upgrade. MRNA stock has now risen 37% since the beginning of December.
Microchip and Semiconductor Stocks Are Pulling Back
Fueled by the hype surrounding artificial intelligence (AI), stocks of microchip and semiconductor companies led the market higher in 2023. Shares of Nvidia (NASDAQ:NVDA) increased 238% last year, while the stock of Advanced Micro Devices (NASDAQ:AMD) rose 125%. Now, though, it appears that stocks of chip and semiconductor companies are pulling back. AMD stock has dropped 9% since the last trading day of 2023, while NVDA stock has fallen 5% and appears unable to break above resistance at $500 a share.
Other chip and semi stocks are also sliding lower to start 2024. This could be the result of short-term profit-taking or the start of a bigger rotation out of tech and a move away from the AI trade that dominated markets last year. It will take some time to play out, but this type of sector rotation is common in the market. In 2022, stocks of oil and gas companies dominated only to become among the worst performers last year as investors dumped big oil in favor of big tech.
On the date of publication, Joel Baglole held a long position in NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
More From InvestorPlace
The #1 AI Investment Might Be This Company You’ve Never Heard Of
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post 2023 in Review: Key Stock Trends and Sector Shifts Unveiled appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-05
|
AMD
|
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum and price momentum.
ADVANCED MICRO DEVICES, INC. (AMD) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
FUNDAMENTAL MOMENTUM: PASS
TWELVE MINUS ONE MOMENTUM: PASS
FINAL RANK: PASS
Detailed Analysis of ADVANCED MICRO DEVICES, INC.
AMD Guru Analysis
AMD Fundamental Analysis
More Information on Dashan Huang
Dashan Huang Portfolio
About Dashan Huang: Dashan Huang is an Assistant Professor of Finance at the Lee Kong Chian School of Business at Singapore Management University. His paper "Twin Momentum" looked at combining traditional price momentum with improving fundamentals to generate market outperformance. In the paper, he identified seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that he combined into a single fundamental momentum measure. He showed that stocks in the top 20% of the universe according to that measure outperformed the market going forward. When he combined that measure with price momentum, he was able to double its outperformance.
Additional Research Links
Top NASDAQ 100 Stocks
Top Technology Stocks
Top Large-Cap Growth Stocks
High Momentum Stocks
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-05
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Like most other tech stocks, Advanced Micro Devices (NASDAQ:AMD) has been off to a rough start for 2024. After reaching prices nearing $150 per share in late December, AMD stock has since slid back to around $135 per share.
The general direction of the broad market has played a role in this. However, valuation-related worries have also been a factor. AMD continues to trade at a moderately high premium to its main peer, Nvidia (NASDAQ:NVDA).
This comes despite the fact that Nvidia has made far more commercial progress in the area of AI-compatible chips.
But while these factors suggest that declines are more likely than further gains in 2024 for AMD shares, it’s not necessarily set in stone that things play out this way. There’s still a path to further gains for the stock.
Why? Let’s take a closer look and find out.
AMD Stock and the Latest Round of Bearishness
As seen from AMD’s latest price performance, the stock is experiencing another round of bearishness. Again, much of this is in tandem with investor sentiment about the broad market. The November and December rally has given way to a January sell-off, as the market re-assess how much the macro picture will improve this year.
This negative sentiment shift could carry on in the near-term, having a further impact on the valuation of AMD stock. Alongside this, the other aforementioned factor affecting AMD’s price performance may not be waning in impact, either. Valuation concerns have only just now had an effect, despite commentators from Barron’s and elsewhere expressing them a month ago.
Possibly in “priced for perfection” territory, if Advanced Micro Devices falls short of expectations, when it releases its latest results/updates to guidance later this month, investors could use it as justification to make their exit from the stock.
Then again, maybe not. Although the skeptics may think that it’s the beginning of the end for AMD’s incredible AI-driven run-up, that’s not necessarily the case. Subsequent developments related to the company’s move into chips for the generative AI market could instead provide more runway.
The Ingredients are in Place for Another Banner Year
At present, the price-to-forward-earnings ratio for AMD stock is approximately 51. NVDA stock has a forward earnings ratio of only 38.9. On the surface, this suggests that AMD is overvalued, given that it’s Nvidia, not Advanced Micro Devices, that has already capitalized on the AI chips trend.
Still, this may be a short-sighted takeaway. AMD’s management has been quite conservative in its AI-related sales forecasts. Back in October, CEO Lisa Su forecasted that the company would sell $2 billion worth of its Instinct MI300 accelerators in 2024. However, AMD could ship 400,000 units of this chip this year.
With comparable chips from Nvidia selling for tens of thousands per unit, clearly there’s room for the MI300 to have an outsized impact on AMD’s fiscal results this year. That’s not all. As discussed recently, the company has another promising AI chip product: its Ryzen 8040 Series processors for laptops.
Put it all together, and AMD clearly has the ingredients in place for another banner year. The company could “beat and raise” in the quarters ahead, the sell-side could continue raising their earnings forecasts, and the market may carry on factoring in future growth into the stock price.
The Verdict
If weakness persists with AMD shares in the coming weeks, this may work to your advantage. That’s not to say that you’ll be able to buy this stock at prices last hit in January 2023, but the recent pullback, or any pullback ahead of earnings, may prove to be a solid entry point.
Considering Advanced Micro Devices’ latest product launches, plus continued strong demand trends for AI chips, chances are this month’s quarterly earnings release will unveil positive surprises rather than major disappointment.
As the months progress, and the company not merely meets, but beats, AI-related expectations, the stock could re-hit its high water mark ($161.91 per share), then keep heading up to new highs.
Hence, do not get scared off by the macro doom-and-gloom, or by the valuation skeptics. Make AMD stock a buy instead.
AMD stock earns an A rating in Portfolio Grader.
On the date of publication, Louis Navellier had a long position in NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The 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.
More From InvestorPlace
The #1 AI Investment Might Be This Company You’ve Never Heard Of
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post Why AMD Stock Stands to Stay a Winner appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-05
|
AMD
|
In today's video, I discuss recent updates impacting Advanced Micro Devices (NASDAQ: AMD). Check out the short video to learn more, consider subscribing, and click the special offer link below.
*Stock prices used were the market prices of Jan. 4, 2024. The video was published on Jan. 5, 2024.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Jose Najarro has positions in Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends Advanced Micro Devices, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has a disclosure policy. Jose Najarro is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link, they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
The graphics card market is no longer a duopoly. Intel (NASDAQ: INTC) launched its first discrete family of graphics cards in late 2022. While the launch was bumpy, the company managed to offer a compelling value proposition for gamers in the budget portion of the market.
Nvidia (NASDAQ: NVDA) is still the market leader by far, and Advanced Micro Devices (NASDAQ: AMD) is in a distant second place. Intel has gained a small foothold, but only in the budget portion of the market. The company's issues with buggy software drivers, particularly soon after launch, have likely driven some gamers away.
Another shot in 2024
Intel's first generation of graphics cards made no attempt to compete with Nvidia and AMD at higher price points. The Arc A750 sells today for around $210, and the Arc A770 goes for around $320, although prices have dipped lower at times. These cards are competitive for the price, although performance can be inconsistent due to nagging driver issues.
Helping Intel in 2023 were lackluster mid-range graphics card launches from both Nvidia and AMD. Nvidia's RTX 4060 and RTX 4060 Ti came with limitations and high price tags. Tom's Hardware concluded that the priciest variant was "overpriced for what you get, much like most of the rest of Nvidia's current RTX 40-series lineup."
AMD's efforts weren't much better. The RX 7600 wasn't much of an upgrade over previous models, and the value proposition, compared to last-gen products, was weak, even after a last-minute price cut.
While Nvidia is expected to roll out a product refresh soon, genuinely new mid-range graphics cards from Nvidia and AMD likely won't be coming until 2025. The gap between Nvidia's RTX 3060 and RTX 4060 was more than two years, and the RTX 4060 has only been on the market since mid-2023. AMD may fill in some gaps in its lineup in 2024, but next-generation products are likely a ways off.
Intel's next-generation graphics cards, codenamed Battlemage, are expected to arrive sometime in 2024. With Battlemage, Intel is expected to move up into the enthusiast portions of the market that its first-generation products avoided. While Intel probably won't be going toe-to-toe with Nvidia's highest-end products, Battlemage should appeal to a broader swath of gamers.
Intel proved with its first-generation products that it can produce capable graphics hardware. With its second-generation products, it must prove that it's committed enough to the market to continually improve its software and eliminate the bugs and inconsistencies that have been holding it back.
A multibillion-dollar opportunity
Jon Peddie Research expects the market for discrete graphics cards to grow to $39 billion by 2026. That estimate was thrown out in late 2022 before the artificial intelligence (AI) bonanza caused demand for data center GPUs to explode. Considering just the market for graphics cards aimed at gaming, however, that's likely still a reasonable estimate.
In addition to winning a portion of the graphics card market, Intel's increased work on graphics can benefit it in other ways. The company's Meteor Lake CPUs, which launched in December for laptops, feature revamped integrated GPUs that deliver enormous performance gains. One set of benchmarks, for example, shows a 33% performance gain and a doubling of power efficiency over previous-generation models. Intel has long lagged AMD in terms of integrated graphics performance, but that gap now appears to be closing.
While Intel's initial graphics card launch didn't go smoothly, the software situation has greatly improved over the past year. Whenever the company manages to get Battlemage out the door, it will be in a good position to increase its market share and cement its status as a viable alternative to Nvidia and AMD.
Should you invest $1,000 in Intel right now?
Before you buy stock in Intel, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Intel wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Timothy Green has positions in Intel. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
David Tepper is a billionaire investor who runs the Appaloosa investment fund. He reports his holdings quarterly, and investors can learn a lot from where the money is coming from and where it's going.
In this video, Travis Hoium covers the biggest holdings in Tepper's fund and where he is seeing big opportunities in the market.
*Stock prices used were end-of-day prices of Dec. 28, 2023. The video was published on Jan. 3, 2024.
Should you invest $1,000 in Microsoft right now?
Before you buy stock in Microsoft, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Microsoft wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Travis Hoium has positions in Alphabet and Intel. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, FedEx, Microsoft, Nvidia, Qualcomm, Taiwan Semiconductor Manufacturing, and Uber Technologies. The Motley Fool recommends Alibaba Group and Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy. Travis Hoium is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum and price momentum.
ADVANCED MICRO DEVICES, INC. (AMD) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
FUNDAMENTAL MOMENTUM: PASS
TWELVE MINUS ONE MOMENTUM: PASS
FINAL RANK: PASS
Detailed Analysis of ADVANCED MICRO DEVICES, INC.
AMD Guru Analysis
AMD Fundamental Analysis
More Information on Dashan Huang
Dashan Huang Portfolio
About Dashan Huang: Dashan Huang is an Assistant Professor of Finance at the Lee Kong Chian School of Business at Singapore Management University. His paper "Twin Momentum" looked at combining traditional price momentum with improving fundamentals to generate market outperformance. In the paper, he identified seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that he combined into a single fundamental momentum measure. He showed that stocks in the top 20% of the universe according to that measure outperformed the market going forward. When he combined that measure with price momentum, he was able to double its outperformance.
Additional Research Links
Top NASDAQ 100 Stocks
Top Technology Stocks
Top Large-Cap Growth Stocks
High Momentum Stocks
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
Server and storage system manufacturer Super Micro Computer (NASDAQ: SMCI) has gone from an under-followed value stock to a top pick among investors looking to bet on artificial intelligence (AI). 2023 was an excellent year: The stock soared nearly 250% higher.
By all indications, Super Micro could still be a great value right now. But I'm passing once again on this data center and enterprise compute manufacturer. Here are three reasons why.
1. Super Micro is sitting on a massive opportunity, but so is everyone else
Super Micro's head of steam has been building thanks to generative AI. Chip companies like Nvidia (NASDAQ: NVDA), AMD (NASDAQ: AMD), and Intel (NASDAQ: INTC) have been tapping the manufacturer to assemble servers (a powerful computer that gets installed in a data center or business office) that power AI applications. It's also getting in on the Arm Holdings data center server game and has a new lineup of servers using chip design start-up Ampere Computing Arm-based chips.
Super Micro just upgraded its revenue guidance for 2024, with expectations for it to be in a range between $10 billion and $11 billion -- versus $9.5 billion to $10.5 billion before. The dramatic rise thanks to AI is especially clear when viewing sales over the last five years. Super Micro was hauling in only a few billion dollars in revenue just three years ago.
Data by YCharts.
However, Super Micro competes against many other companies that design and assemble servers and storage devices on behalf of its semiconductor design and manufacturing partners. Competitors include Cisco Systems, Dell Technologies, Hewlett Packard Enterprise, and a growing presence in the server market from equipment and design manufacturers in Asia like Foxconn and Inspur.
All these peers are also sitting on a massive generative AI opportunity. Super Micro is clearly a standout as it has gone from a small and relatively unknown company to a hot stock riding the AI wave. But I can't ignore the hotly competitive field that Super Micro battles in.
2. It's all about forward earnings growth, but not Super Micro's own growth
At this point, given the sustained growth Super Micro is expecting, many investors are drawn to the cheap valuation -- especially when comparing it to the premium price chip stocks like Nvidia and AMD are fetching these days.
Indeed, Super Micro could be a great long-term value right now. Shares trade for 26 times trailing 12-month earnings per share (EPS), but only 16 times expected EPS for fiscal 2024. That compares to the respective 24 and 27 times expected EPS for Nvidia and AMD for next year.
Data by YCharts.
However, Super Micro's growth is not coming from its own efforts. Rather, it's riding the coattails of others, primarily leaders in semiconductor design, as it makes hay from the AI movement. No matter how you slice it, Super Micro is dependent on ultimate sales of AI servers powered by partners like Nvidia and AMD, making it a type of derivative bet on those businesses' performance. That's a big reason for the relative discount on Super Micro stock.
3. Super Micro admits it has some key disadvantages
Nevertheless, Super Micro is raking in the chips thanks to AI, and its stock is a relative value. So why not just buy?
For me, it's all about the business model. Super Micro is not in full control of its own destiny. It could be very cheap if growth
continues, but that growth and resulting profitability will be dependent on chip design partners Nvidia, AMD, and the like -- and less on Super Micro's own execution. Again, by Super Micro's own admission in its financial filings, it has limited ability to stave off competitors over the long term. In the last annual filing, Super Micro said the following (italics inserted by me):
We seek to protect our intellectual property rights with a combination of patents, trademarks, copyrights, trade secret laws, and disclosure restrictions. We rely primarily on trade secrets, technical know-how, and other unpatented proprietary information relating to our design and product development activities.
In other words, the majority of Super Micro's work has no patent protection, which is a key item I look for when investing in hardware-based businesses (like semiconductor stocks). Although Super Micro certainly has its own proprietary way of designing and assembling enterprise computing and storage systems, few of those processes are granted patent and intellectual property (IP) protection. Again, by Super Micro's own admission in its last annual filing:
Our industry is marked by a large number of patents, copyrights, trade secrets and trademarks and by frequent litigation based on allegations of infringement or other violation of intellectual property rights. Our primary competitors have substantially greater numbers of issued patents than we have which may position us less favorably in the event of any claims or litigation with them. Other third parties have in the past sent us correspondence regarding their intellectual property or filed claims that our products infringe or violate third parties' intellectual property rights. In addition, increasingly non-operating companies are purchasing patents and bringing claims against technology companies. We have been subject to several such claims and may be subject to such claims in the future.
When looking for a long-term investment in AI, and in whatever other mega trends lie ahead for the greater IT sector, I can't say "yes" to owning every stock. This kind of risk and lack of competitive differentiation inherent in Super Micro's business model just doesn't cut it for me. Besides, I already own ample shares of Nvidia, AMD, and data center design leader Arista Networks, so buying Super Micro would offer little in the form of portfolio diversification for me.
I understand the draw to Super Micro stock as 2024 gets underway, and the swarm of investors betting on the company could be right in assuming it will be a big beneficiary from the AI movement. But as for me, I'm passing on Super Micro stock again in 2024.
Should you invest $1,000 in Super Micro Computer right now?
Before you buy stock in Super Micro Computer, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Super Micro Computer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of the S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Nicholas Rossolillo and his clients have positions in Advanced Micro Devices, Arista Networks, and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Arista Networks, Cisco Systems, and Nvidia. The Motley Fool recommends Intel and Super Micro Computer and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
Party like it's 1999: That's what many stocks in the Nasdaq-100 did in 2023. The index delivered its biggest gains since the end of the 20th century, skyrocketing nearly 54%.
The sizzling momentum could fade for some Nasdaq stocks. Others, though, could keep the good times rolling, and some laggards could rebound, based on analysts' projections. Here are three Nasdaq-100 stocks Wall Street thinks will soar another 29% or more in 2024.
1. Warner Bros. Discovery
Warner Bros. Discovery (NASDAQ: WBD) started 2023 with a bang, with its shares jumping as much as 68% by late February. Although the stock subsequently gave up much of those early gains, it still ended the year up 20%.
Several analysts look for Warner Bros. Discovery to bounce back in 2024. The average 12-month price target is 36% above the company's current share price.
The big story for Warner Bros. Discovery right now is its discussions about a potential merger with Paramount Global. A combination of the two companies would create an entertainment giant but would also increase Warner Bros. Discovery's debt load.
With Warner's total debt already approaching $45 billion, it's understandable why investors aren't exactly enamored with the idea of a merger with Paramount. Should a deal be announced, we could see some revisions to Wall Street's price targets.
2. Nvidia
Nvidia (NASDAQ: NVDA) ranked as the hottest Nasdaq-100 stock last year. Shares of the chipmaker more than tripled on surging demand for its graphics processing units (GPUs).
Wall Street doesn't expect Nvidia to keep up that torrid pace in 2024. But analysts nonetheless anticipate another great performance. The consensus 12-month price target reflects an upside potential of 33%.
The boom in generative artificial intelligence (AI) shows no signs of ending anytime soon. That should translate into sustained demand for Nvidia's GPUs, which are widely viewed as the gold standard for powering AI apps.
There's one potential fly in the ointment, though. Rivals including Advanced Micro Devices and customers such as Alphabet's Google Cloud are rolling out their own powerful AI chips. Nvidia's almost total dominance of the market might come to an end in the not-too-distant future.
3. PayPal Holdings
Not every Nasdaq-100 stock was a solid winner in 2023. PayPal Holdings' (NASDAQ: PYPL) shares sank nearly 14% last year after plunging 62% in 2022.
The fintech pioneer could have a light at the end of the tunnel, though, if Wall Street is right. The average analysts' 12-month price target for PayPal is more than 29% above the current share price.
Despite the dismal stock performance in recent years, PayPal's underlying business appears to be in pretty good shape. The company's net revenue rose 8% year over year in the third quarter of 2023. Adjusted earnings per share soared 20%. Total payment volume jumped 15%.
There's still uncertainty for PayPal, though. The company has a new leadership team. Competition in the digital payments market is intensifying. Its business loans portfolio has deteriorated.
But with a price/earnings-to-growth (PEG) ratio of only 0.51, PayPal's valuation looks quite attractive and reflects analysts' expectations of more robust growth in the future.
Should you invest $1,000 in PayPal right now?
Before you buy stock in PayPal, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and PayPal wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Keith Speights has positions in Alphabet and PayPal. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Nvidia, PayPal, and Warner Bros. Discovery. The Motley Fool recommends the following options: short March 2024 $67.50 calls on PayPal. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
Analyst Gus Richard of Northland Securities has been awarded the TipRanks All-Star Analyst of the Day title. Remarkably, the Top-rated Analyst holds an impressive rank of #67 out of the 8,653 Wall Street analysts tracked by TipRanks. One of the prominent stocks in his coverage is Advanced Micro Devices (NASDAQ:AMD), for which he is recognized as the Most Accurate and Profitable analyst.
AMD is a semiconductor company specializing in high-performance computing and graphics solutions.
Most Profitable and Accurate Analyst on AMD Stock
When we look at Richard’s recommendation for AMD, we see that over the past year, Richard has had an 91% success rate on the stock. Plus, he has earned an impressive average return of 86.1% in the said period.
To date, Richard’s most profitable rating was a Buy on AMD itself. The analyst earned a massive 575.7% return on the call between February 29, 2016, and February 28, 2017.
Richard primarily focuses on covering the technology sector in the U.S. market. On an overall basis, copying Richard’s trades and holding them for a year could give you an average return of 21.3%, with 62% of the trades yielding a profit!
Following phenomenally successful analysts’ ratings can add profit to your portfolio. Find the best analyst to follow for any stock by scrolling down to the “Best Analyst Covering” feature on its Analyst Forecast page.
To follow the best Wall Street analysts, take a look at the list of Top Analysts on TipRanks.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
By Johann M Cherian and Shristi Achar A
Jan 4 (Reuters) - Futures tracking the S&P 500 and Nasdaq were largely subdued on Thursday as investors awaited more U.S. economic data for cues on the Federal Reserve's monetary easing path, while Apple slipped following a rating downgrade.
Wall Street stumbled in the first two sessions of 2024, with the benchmark S&P 500 .SPX notching its worst two-day performance since late October as investors booked profits after a blistering rally last year.
Hopes that the Fed could start interest rate cuts this year had driven much of the gains towards the end of 2023, though the latest minutes from the central bank's December policy meeting did not offer many clues on when the easing might commence.
"Those inclined to believe a pivot to lower rates is on the way could take reassurance from indications the central bank thinks inflation is under control," said Russ Mould, investment director at AJ Bell.
"Anyone more cautious on the prospects for near-term rate cuts could point to a (Fed) reference to maintaining a restrictive stance 'for some time'."
Traders now see a 68.3% chance for at least a 25 basis points (bps) rate cut in March and a near 94% probability for May, according to the CME Group's FedWatch tool.
Yields on U.S. Treasury tenors, an indicator of interest rate expectations, edged up, with the yield on the benchmark 10-year note US10YT=RR climbing to 3.964%. US/
Investors now await the ADP National Employment Report due at 8:15 a.m. ET, and a key jobs report on Friday, both of which could shed some light on the health of the labor market and influence expectations on the rate trajectory.
Also on tap are initial jobless claims data for the week ended Dec. 30 and December S&P services sector activity data.
AppleAAPL.O was the only megacap stock in the red, down 0.7% in premarket trading, after brokerage Piper Sandler downgraded the iPhone maker to "neutral" from "overweight", days after Barclays also cut its rating.
Micron TechnologyMU.O rose 1.1% after brokerage Piper Sandler upgraded its recommendation on the chipmaker to "overweight" from "neutral".
At 7:04 a.m. ET, Dow e-minis 1YMcv1 were up 41 points, or 0.11%, S&P 500 e-minis EScv1 were down 1.5 points, or 0.03%, and Nasdaq 100 e-minis NQcv1 were down 23 points, or 0.14%.
Among other movers, sportswear makers Nike NKE.N and Foot Locker FL.N shed 1.2% and 2.4%, respectively, after UK retailer JD SportsJD.L lowered its annual profit forecast.
Dow component Walgreens Boots Alliance WBA.O added 3.3% after reporting better-than-expected profit for the first quarter on strength in its pharmacy operations.
MattelMAT.O dropped 1.5% after brokerage Roth MKM downgraded the Barbie doll maker to "neutral".
Fubotv FUBO.N gained 2.4% after the sports TV streaming platform and Nexstar Media NXST.O reached a new multi-year distribution agreement.
(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Devika Syamnath)
((johann.mcherian@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
By Johann M Cherian and Shristi Achar A
Jan 4 (Reuters) - The benchmark S&P 500 and the Nasdaq were subdued on Thursday after a jobs report indicated resilience in the labor market, tempering expectations of how early interest-rate cuts could begin.
Wall Street stumbled in the first two sessions of 2024, with the S&P 500 .SPX notching its worst two-day performance since late October as investors booked profits after a blistering rally last year.
Bets that the Federal Reserve could start reducing interest rates this year had driven much of the gains towards the end of 2023, though the latest minutes from the central bank's December policy meeting did not offer many clues on when the easing might commence.
Traders see a 66.4% chance for at least a 25-basis point (bps) rate cut in March and a near 92% probability for May, according to the CME Group's FedWatch tool.
An ADP National Employment report showed U.S. private employers hired more workers than expected in December, pointing to persistent strength in the labor market that should continue to sustain the economy.
"This plays into the hands of whoever is expecting a soft landing. But let's not forget that we've had a big rally so what we're seeing, what we saw in the past couple of days, was a technical adjustment."
Separately, a weekly Labor Department reportshowed more Americans filed for state unemployment claims than expected.
Yields on longer-dated U.S. Treasury tenors rose after the data, with the yield on the benchmark 10-year note US10YT=RR climbing to 3.991%. US/
Investors also assessed the S&P Global's final reading of composite PMI data for December at 50.9, compared with a preliminary reading of 51.0.
Dow component MerckMRK.N added 1.7% after TD Cowen upgraded the drugmaker to "outperform" on growth prospects.
At 9:50 a.m. ET, the Dow Jones Industrial Average .DJI was up 102.81 points, or 0.27%, at 37,533.00, the S&P 500 .SPX was up 0.60 points, or 0.01%, at 4,705.41, and the Nasdaq Composite .IXIC was down 54.92 points, or 0.38%, at 14,537.30.
Micron TechnologyMU.O gained 1.1% after brokerage Piper Sandler upgraded its recommendation on the chipmaker to "overweight".
Mobileye GlobalMBLY.O sank 26.3% after forecasting preliminary fiscal 2024 revenue below estimates.
Walgreens Boots AllianceWBA.O reversed premarket gains to shed 10.9% after the U.S. pharmacy chain nearly halved its dividend.
Advancing issues outnumbered decliners by a 1.10-to-1 ratio on the NYSE and by a 1.02-to-1 ratio on the Nasdaq.
The S&P index recorded 13 new 52-week highs and no new low, while the Nasdaq recorded 14 new highs and 30 new lows.
(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Devika Syamnath)
((johann.mcherian@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
By Johann M Cherian and Shristi Achar A
Jan 4 (Reuters) - The benchmark S&P 500 and the Nasdaq were on track for a lower open on Thursday after a jobs report indicated resilience in the labor market, tempering expectations on how early interest-rate cuts could begin.
Wall Street stumbled in the first two sessions of 2024, with the benchmark S&P 500 .SPX notching its worst two-day performance since late October as investors booked profits after a blistering rally last year.
Bets that the Federal Reserve could start reducing interest rates this year had driven much of the gains towards the end of 2023, though the latest minutes from the central bank's December policy meeting did not offer many clues on when the easing might commence.
Traders see a 66.4% chance for at least a 25-basis point (bps) rate cut in March and a near 95% probability for May, according to the CME Group's FedWatch tool.
An ADP National Employment report showed U.S. private employers hired more workers than expected in December, pointing to persistent strength in the labor market that should continue to sustain the economy.
"This plays into the hands of whoever is expecting a soft landing. But let's not forget that we've had a big rally so what we're seeing, what we saw in the past couple of days, was a technical adjustment."
Separately, a Labor Department report showed Americans filing for state unemployment claims stood at 202,000 in the previous week, lower than expectations of 216,000 claims.
Yields on longer-dated U.S. Treasury tenors rose after the data, with the yield on the benchmark 10-year note US10YT=RR climbing to 3.987%. US/
In company news, Apple AAPL.O slid 1.2% in premarket trading after brokerage Piper Sandler downgraded the iPhone maker to "neutral" from "overweight", days after Barclays also cut its rating.
Micron TechnologyMU.O rose 0.5% after brokerage Piper Sandler upgraded its recommendation on the chipmaker to "overweight" from "neutral".
At 8:38 a.m. ET, Dow e-minis 1YMcv1 were up 83 points, or 0.22%, S&P 500 e-minis EScv1 were down 2.25 points, or 0.05%, and Nasdaq 100 e-minis NQcv1 were down 69 points, or 0.42%.
Among other movers, Mobileye GlobalMBLY.O sank 27.9% after forecasting preliminary fiscal 2024 revenue below estimates as the autonomous driving tech company expects its customers to pull back on orders as they clear excess inventory.
Dow component Walgreens Boots AllianceWBA.O added 0.9% after reporting better-than-expected profit for the first quarter on strength in its pharmacy operations.
Sportswear makers Nike NKE.N and Foot Locker FL.N shed 1.2% and 2.1%, respectively, after UK retailer JD SportsJD.L lowered its annual profit forecast.
MattelMAT.O dropped 1.4% after brokerage Roth MKM downgraded the Barbie doll maker to "neutral".
(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Devika Syamnath)
((johann.mcherian@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window.
Futures up: Dow 0.09%, S&P 0.06%, Nasdaq 0.11%
Jan 4 (Reuters) - U.S. stock index futures ticked up on Thursday, recovering from a grim start to the new year, as investors awaited more economic data for cues on the Federal Reserve's monetary easing path, while Apple slipped following a rating downgrade.
Wall Street stumbled in the first two sessions of 2024, with the benchmark S&P 500 .SPX notching its worst two-day performance since late-October as investors booked profits after a blistering rally last year.
Hopes that the Fed could start interest rate cuts this year had driven much of the gains towards the end of 2023, though the latest minutes from the central bank's December policy meeting did not offer many clues on when the easing might commence.
Traders now see a 72.6% chance for at least a 25 basis points (bps) rate cut in March and a near 96% probability for May.
Yields on U.S. Treasury tenors, an indicator of interest rate expectations, edged up, with the yield on the benchmark 10-year note US10YT=RR climbing to 3.955%. US/
Investors now await the ADP National Employment Report due at 8:15 a.m. ET, ahead of a key jobs report on Friday, both of which could shed some light on the health of the labor market and influence expectations on the rate trajectory.
Economists polled by Reuters expect private payrolls to have increased by 115,000 in December, from a 103,000 rise the month before.
Also on tap are initial jobless claims data for the week ended Dec. 30 and December S&P services sector activity data.
Apple AAPL.O was the only megacap stock in the red, down 0.9% in trading before the bell, after brokerage Piper Sandler downgraded the iPhone maker to "neutral" from "overweight".
Micron Technology MU.O rose 2.1% after brokerage Piper Sandler upgraded its recommendation on the chipmaker to "overweight" from "neutral".
Other semiconductor stocks such as Advanced Micro Devices AMD.O and Broadcom AVGO.O also gained 0.7% and 0.8%, respectively, recovering from a recent downturn.
At 5:52 a.m. ET, Dow e-minis 1YMcv1 were up 35 points, or 0.09%, S&P 500 e-minis EScv1 were up 3 points, or 0.06%, and Nasdaq 100 e-minis NQcv1 were up 17.75 points, or 0.11%.
Among other movers, sportswear makers Nike NKE.N and Foot Locker FL.N shed 1.4% and 1.4% after UK retailer JD SportsJD.L lowered its annual profit forecast.
Mattel MAT.O dropped 2.6% after brokerage Roth MKM downgraded the Barbie doll maker to "neutral".
Fubotv FUBO.N gained 4.8% after the sports TV streaming platform and Nexstar Media NXST.O reached a new multi-year distribution agreement.
(Reporting by Johann M Cherian in Bengaluru; Editing by Devika Syamnath)
((johann.mcherian@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
By Johann M Cherian and Shristi Achar A
Jan 4 (Reuters) - Wall Street rose on Thursday, boosted by gains in financial stocks, while strong jobs data prompted investors to tweak their expectations of how early interest-rate cuts could begin.
The recovery in the three main U.S. stock indexes follows a downbeat start to 2024, with the S&P 500 .SPX notching its worst two-day performance since late October as investors booked profits after a blistering rally last year.
Bets that the Federal Reserve could start reducing interest rates this year had driven much of the gains towards the end of 2023, though the latest minutes from the central bank's December policy meeting did not offer many clues on when the easing might commence.
Traders see a 66.4% chance for at least a 25-basis point (bps) rate cut in March and a near 93% probability for May, according to the CME Group's FedWatch tool.
Financials .SPSY led gains among the S&P 500 sectors with a 1.1% rise, underpinned by a 3.4% advance in Allstate ALL.N after Morgan Stanley lifted its rating on the insurer to "overweight".
An ADP National Employment report showed U.S. private employers hired more workers than expected in December, pointing to persistent strength in the labor market that should continue to sustain the economy.
Private payrolls increased by 164,000 in December, compared with a 101,000 rise the month before. The report comes ahead of the official employment data due on Friday.
"Today's numbers were a little muted, they weren't something that says, we need to cut rates tomorrow," said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
"So what you're seeing is people resetting expectations as to when those rate cuts will start."
Separately, a weekly Labor Department report showed more Americans filed for state unemployment claims than expected.
Yields on longer-dated U.S. Treasury tenors rose after the data, with the yield on the benchmark 10-year note US10YT=RR climbing to 3.9761%. US/
Investors also assessed the S&P Global's final reading of composite PMI data for December at 50.9, compared with a preliminary reading of 51.0.
At 11:29 a.m. ET, the Dow Jones Industrial Average .DJI was up 274.77 points, or 0.73%, at 37,704.96, the S&P 500 .SPX was up 20.24 points, or 0.43%, at 4,725.05, and the Nasdaq Composite .IXIC was up 31.25 points, or 0.21%, at 14,623.46.
Apple AAPL.O slid 1.1% after brokerage Piper Sandler downgraded the iPhone maker to "neutral", days after Barclays also cut its rating.
Dow component MerckMRK.N added 2.4% after TD Cowen upgraded the drugmaker to "outperform" on growth prospects.
Micron TechnologyMU.O gained 1.8% after brokerage Piper Sandler upgraded its recommendation on the chipmaker to "overweight".
Mobileye GlobalMBLY.O sank 24.3% after forecasting preliminary fiscal 2024 revenue below estimates, while Walgreens Boots AllianceWBA.O shed 6.4% after the U.S. pharmacy chain nearly halved its dividend.
Advancing issues outnumbered decliners by a 1.77-to-1 ratio on the NYSE and by a 1.47-to-1 ratio on the Nasdaq.
The S&P index recorded 16 new 52-week highs and no new lows, while the Nasdaq recorded 45 new highs and 50 new lows.
(Reporting by Johann M Cherian and Shristi Achar A in Bengaluru; Editing by Devika Syamnath)
((johann.mcherian@thomsonreuters.com;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
2023 was the year of artificial intelligence (AI) investing, and perhaps the biggest winners were the "Magnificent Seven" stocks, a moniker that includes mega-cap behemoths Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta Platforms. One of the biggest standouts among this cohort was semiconductor company Nvidia, which saw its market cap balloon to more than $1 trillion, fueled by unprecedented demand for chips used to train generative AI models.
While each of the companies above has a multitude of ways to benefit from AI tailwinds, savvy investors should know that myriad opportunities exist in the capital markets. One such company that looks set up to dominate in 2024 is Nvidia's top rival, Advanced Micro Devices (NASDAQ: AMD).
While the company's growth in 2023 paled in comparison to Nvidia's, AMD may have just made its best countermove yet, setting up 2024 to be a milestone year. Let's dig into what AMD has in the cards, and why scooping up shares now could be a lucrative opportunity.
AMD's answer to Nvidia
In early December, AMD released a new line of AI chips. The cornerstone of the product release was the MI300X, AMD's biggest answer yet to Nvidia's unrelenting graphics processing units (GPUs) operation. During the unveiling, AMD's CEO Lisa Su made a bold declaration when she called the MI300X "the most advanced AI accelerator in the industry."
If that doesn't get you excited, let's check out some of the use cases around the MI300X accelerator that support Su's high degree of confidence.
Microsoft is going to use the MI300X for applications in its leading cloud platform Azure, a strategy that could further propel the dominance of ChatGPT.
Remember, Microsoft previously made a massive $10 billion investment in OpenAI, the parent company of ChatGPT. Moreover, with the release of its new CoPilot offering, Microsoft's plans to integrate ChatGPT throughout its ecosystem are becoming increasingly clear. Therefore, it's likely the Windows developer will be highly selective with its vendor partners to ensure its massive investments in AI pay off.
Another noteworthy partnership includes Meta, which announced that it will be using the MI300X for AI inferencing. This is important because these use cases could be early indications that AMD's newest chips will be a bellwether for data center business -- a market that is largely dominated by Nvidia right now.
Image Source: Getty Images
How much growth can AMD expect?
Following the public release of the MI300X, Su sat down with CNBC to speak in more detail about how these chips could represent the next frontier of growth. More specifically, Su said that she believes the addressable market for data center AI accelerators will reach $400 billion by 2027.
To put this figure in perspective, during AMD's Q3 earnings call management guided for $2 billion in data center GPU revenue for 2024. Although this looks like a low forecast relative to the potential size of the market, I'm not worried for AMD.
Given the sky-high demand for Nvidia's GPUs, the company has made significant investments in manufacturing and production. I see this as an opportunity for AMD to make inroads in the data center AI market and acquire additional market share. Why? Because as Nvidia's backlog continues to grow, I see customers diversifying their GPU needs and turning to more than one provider.
So while Nvidia may dominate the space right now, I think AMD has a greenfield opportunity to provide customers with commensurate (if not superior) technology, and do so at a potentially lower cost and faster delivery time.
For this reason, I see AMD's forecast of $2 billion in data center GPU revenue to be conservative. Furthermore, I am incredibly bullish that this figure could grow exponentially in just a few years.
Is AMD stock going parabolic?
AMD stock rocketed 123% during 2023. Yet Hans Mosesmann of Rosenblatt Securities sees another 45% upside for AMD stock, giving it a price target of $200.
Don't worry too much about whether AMD reaches or exceeds this price target in 2024. Rather, ask yourself if you believe in the long-term secular trend of AI, and if AMD is well positioned to benefit.
I think the MI300X came at just the right time. While Nvidia is the dominant player in AI GPUs, AMD has a unique opportunity to capitalize on unprecedented demand in the data center space in particular. Investors should view AI as more of a marathon than a sprint, keeping in mind that AMD spent a good portion of 2023 making strategic acquisitions, which haven't been fully integrated or monetized yet.
So while AMD's current growth is not as exciting as that of its larger counterpart, its roadmap is hard to ignore. Moreover, as various applications for GPU technology begin to take shape, I see AMD emerging as a formidable leader in the space.
If you're looking for alternatives to Nvidia or seeking hedges to other AI plays in your portfolio, I wouldn't sleep on AMD. In fact, given the early positive indications of MI300X's demand, 2024 could end up being a massive year for the chip company, and represent the beginning of a long-term strong force in data center AI.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Adam Spatacco has positions in Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
Advanced Micro Devices (AMD) closed the most recent trading day at $136.01, moving +0.51% from the previous trading session. The stock outperformed the S&P 500, which registered a daily loss of 0.34%. On the other hand, the Dow registered a gain of 0.03%, and the technology-centric Nasdaq decreased by 0.56%.
Heading into today, shares of the chipmaker had gained 15.84% over the past month, outpacing the Computer and Technology sector's gain of 1.27% and the S&P 500's gain of 2.56% in that time.
The upcoming earnings release of Advanced Micro Devices will be of great interest to investors. It is anticipated that the company will report an EPS of $0.77, marking a 11.59% rise compared to the same quarter of the previous year. Alongside, our most recent consensus estimate is anticipating revenue of $6.11 billion, indicating a 9.2% upward movement from the same quarter last year.
Any recent changes to analyst estimates for Advanced Micro Devices should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. As of now, Advanced Micro Devices holds a Zacks Rank of #4 (Sell).
Investors should also note Advanced Micro Devices's current valuation metrics, including its Forward P/E ratio of 37.3. This indicates a premium in contrast to its industry's Forward P/E of 27.8.
We can also see that AMD currently has a PEG ratio of 2.9. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The average PEG ratio for the Electronics - Semiconductors industry stood at 2.88 at the close of the market yesterday.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 202, positioning it in the bottom 20% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow AMD in the coming trading sessions, be sure to utilize Zacks.com.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-04
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The semiconductor industry took the world by storm in 2023, and I believe it will continue to remain a highlight of this year too. It is hard to imagine a world without semiconductor chips, and if you want to make the most of the ample potential these companies have, it is best to invest in semiconductor stocks. You should especially consider the hottest semiconductor stocks that we have listed here!
Analysts expect a steady expansion of this industry, and as the economy improves, we could see companies report stellar financials. This is still an early stage for the industry and it has many years of growth. So, if you haven’t had a chance to buy Nvidia (NASDAQ:NVDA) stock before it soared by more than 200%, you can still look for the hottest semiconductor stocks that have solid long-term potential. Let’s take a look at them.
Advanced Micro Devices (AMD)
Source: JHVEPhoto / Shutterstock.com
Advanced Micro Devices (NASDAQ:AMD) is Nvidia’s biggest competitor and it is taking giant strides in the industry. While 2023 may not have been a blockbuster year for the company, it is set to rebound this year. It is expected that PC sales will rise again, and we could see AMD report better sales revenue from the same since the company supplies chips for PCs. Additionally, the third quarter revenue was up 8% quarter over quarter, and the EPS was up 21%. This shows that the company is gaining ground and improving its business performance.
Top tech giants including Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) have announced the adoption of AMD’s chips and this is a strong shift from Nvidia’s chips. That said, companies not willing to wait for weeks to get their hands on Nvidia chips will be happy to use AMD’s latest AI chips.
AMD stock is up over 100% in the year and has generated more than 600% returns in the past five years. This speaks a lot about the strength of the business to survive amidst all market conditions. Trading at $135 today, the stock looks undervalued to me.
Stifel Financial (NYSE:SF) analyst has upgraded the price target for the stock from $145 to $170 and this shows a 20% upside from the current level.
AMD has everything it takes to be a long-term investment. It has a solid history, exceptional leadership, and the ability to survive any storm. As the demand for PCs improves, we could see AMD report impressive numbers. It can be a long-term winner, but you must have the patience to hold on to it.
Intel (INTC)
Source: Kate Krav-Rude / Shutterstock.com
A hot semiconductor stock for 2024, Intel (NASDAQ:INTC) benefits from the CHIPS Act. However, it hasn’t been able to impress investors with the financials. However, this year could be different. The company will launch Gaudi 3, an AI accelerator that is expected to beat Nvidia’s chips in data centers.
Additionally, the company launched an independent AI company, Articul8 AI, in collaboration with DigitalBridge Group. The company will offer secure and cost-effective AI solutions to enterprises. Financial details about the company aren’t disclosed yet, but this move can help Intel expand its market share.
While Intel has been late to enter the AI race, if the chips are worth the hype, we could see a strong improvement in Intel’s business. The company has been around for a while and they do know how to run a business, but the AI industry is getting highly competitive, and it is time to prove their worth. The company is also expanding its manufacturing facility in Ireland and Oregon.
INTC stock is up 69% in the year but relatively flat in the past five years. I believe the company will be able to sustain the current momentum, and we could see a slow but steady upside from the current level of $47.
Stifel Financial analyst also increased the price target from $38 to $45 and has a hold rating on the stock. The analyst finds the semiconductor stock attractive as we head into 2024.
Taiwan Semiconductor Manufacturing (TSM)
Source: Sundry Photography / Shutterstock.com
A well-known name in the semiconductor industry, Taiwan Semiconductor (NYSE:TSMC) is one of the hottest semiconductor stocks to own. It makes chips for the biggest tech giants including Nvidia, and holds more than 50% of the market share in the semiconductor space. It benefits from the CHIPS Act and is building a plant in Arizona to make the most of it. While this has impacted the earnings, it still has an upside potential.
As the world’s leading semiconductor foundry, TSMC has the expertise and leadership to continue expanding its market share. One big reason to invest in the stock is that the company doesn’t produce chips for general sale but caters to other companies to meet their needs. This means it will have a steady revenue flow throughout the year. If the demand for PCs and smartphones improves, the company could see a significant improvement in the chip demand.
The stock is up 31% in the year and is exchanging hands for $100. I believe TSMC is a long-term stock to buy and hold.
On the date of publication, Vandita Jadeja did not hold (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.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post The 3 Hottest Semiconductor Stocks to Watch in 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-03
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
What to do with $100,000? Where to invest that kind of money? These stocks to buy for 2024 include technology stocks, which continue to be a safe bet for growth-oriented investors. Of course, tech stocks are coming off their best year since the heady days of the internet bubble in 1999, with the Nasdaq index rising 43% in 2023. Despite the big rally, there’s still reason to be bullish on tech, semiconductor and microchip stocks in particular.
These securities have a multi-year growth driver behind them in artificial intelligence (AI). While AI drove the Nasdaq higher last year, the technology is still in its infancy, and companies are only now starting to monetize it. Expect demand for AI microchips and semiconductors to continue growing as the technology changes the world. Here are three stocks to buy for the $100,000 portfolio: 2024 edition.
Advanced Micro Devices (AMD)
Source: JHVEPhoto / Shutterstock.com
Analysts at Stifel Financial (NYSE:SF) just upgraded their price target on shares of chipmaker Advanced Micro Devices (NASDAQ:AMD) from $145 to $170. The new price target implies a 20% upside for AMD stock from current levels after a 123% gain over the past 12 months. In December alone, AMD’s share price rose 20%. Stifel analysts cite AMD’s strong balance sheet and ties to secular trends such as AI as reasons to remain bullish on the stock.
AMD stock has been a long-term winner for investors, gaining 650% over the past five years. The increase in 2023 was only about half the rise with rival chipmaker Nvidia‘s (NASDAQ:NVDA) stock; AMD has outpaced Nvidia over the past six months (24% vs. 12%) and appears to have momentum heading into 2024. AMD’s executives have also clarified that they are going all-in on AI, recently launching a new series of microchips called the “Ryzen 8040,” specifically for AI applications.
Cadence Design Systems (CDNS)
Source: mrinalpal / Shutterstock.com
Now for a technology stock that most investors are likely unfamiliar with—Cadence Design Systems (NASDAQ:CDNS). Based in Silicon Valley and an ongoing concern since 1988, Cadence produces the software, hardware, and silicon pieces for designing and building integrated circuits, microchips and circuit boards. Think of them as creating the nuts and bolts of the microchip industry. While Cadence Design gets little attention, its stock is up 66% over the past 12 months and 510% over five years.
Heading into 2024, Cadence Design Systems could be a good way to play the rally in chip and semiconductor stocks. The company’s earnings remain strong, and it has forecasted full-year 2023 revenue growth of 15% year-over-year and earnings per share (EPS) growth of 20%. Cadence is also flush with cash of $962 million and long-term debt of $649 million at the end of Q3 2023. CDNS stock isn’t cheap, trading at 75 times future earnings estimates, but the stock’s performance justifies the premium price.
Micron Technology (MU)
Source: Piotr Swat / Shutterstock.com
Sticking with chipmakers, we have Micron Technology (NASDAQ:MU). Its stock is up 12% in the past month after the company posted better-than-expected quarterly results. Over the last 12 months, MU stock has risen 66%, up 155% through five years. Not yet profitable, Micron reported a loss of $0.95 a share for its fiscal first quarter, which was better than the expected loss of $1.01 on Wall Street. Revenue totaled $4.73 billion, which beat analysts’ forecasts of $4.58 billion.
Micron is a leader in dynamic random-access memory chips for desktop computers and servers, and flash memory in smartphones and hard drives. During itsearnings call the company’s management team gave a bullish outlook for AI, saying the technology should drive “multiyear growth.” Micron also said that inventory levels for its memory and storage chips are normal, and it’s working with Nvidia on upcoming AI chips—all music to investors’ ears.
On the date of publication, Joel Baglole held long positions in NVDA and CDNS. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post 3 Stocks to Buy for the $100,000 Portfolio: 2024 Edition appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-03
|
AMD
|
Wall Street closed mixed on Tuesday, dragged down by tech and consumer discretionary stocks. The yield on the U.S. 10-year Treasury Note climbed to a two-week high. Two of the three major stock indexes ended in the red, while one ended in the green.
How Did the Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 25.5 points, or 0.1%, to close at 37,715.54. Eighteen components of the 30-stock index ended in positive territory, while 12 ended in positive.
The tech-heavy Nasdaq Composite dropped 245.41 points, or 1.6%, to close at 14,765.94.
The S&P 500 slid 27 points, or 0.6%, to close at 4,742.83. Five of the 11 broad sectors of the benchmark index closed in the red. The Technology Select Sector SPDR (XLK), the Industrials Select Sector SPDR (XLI) and the Consumer Discretionary Select Sector SPDR (XLY) declined 2.6%, 1% and 0.9%, respectively, while the Health Care Select Sector SPDR (XLV) advanced 1.8%.
The fear-gauge CBOE Volatility Index (VIX) decreased 6% to 13.20. A total of 11.9 billion shares were traded on Tuesday, lower than the last 20-session average of 12.4 billion.
Apple (AAPL) Weighs Down on the Tech Sector
Shares of Apple Inc. AAPL declined 3.6% after Barclays downgraded the tech behemoth’s rating to “underweight”. The analysts cited weakening demand for the company’s flagship mobile iPhone 15 and almost zero upgrades to the iPhone 16 model as the main reason. Demand has been a major concern for the company since early 2023, and its holiday season sales forecast has also been below Wall Street estimates. Apple has also struggled in China’s market since the resurgence of Huawei. Being one of the “Magnificent Seven” stocks, Apple’s plight weighed down on the tech sector and the broader market in general.
Consequently, shares of Microsoft Corporation MSFT and Advanced Micro Devices, Inc. AMD fell 1.4% and 6%, respectively. Microsoft carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
10-Year Treasury Yield Touches 2-Week High
On Tuesday, the U.S. benchmark 10-year treasury yield climbed above the 4% mark to touch a 2-week high before settling at 3.937%. When treasury yields go up, future valuations of mega-cap growth stocks like tech seem unreasonable, and it weighs on the sector.
Economic Data
The U.S. Census Bureau reported that construction spending for November had increased 0.4% as opposed to a consensus of 0.6% for the period. The increase for October was revised up to 1.2% from the previously reported 0.6%.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-03
|
AMD
|
Advanced Micro Devices (AMD) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Shares of this chipmaker have returned +17.1% over the past month versus the Zacks S&P 500 composite's +4% change. The Zacks Electronics - Semiconductors industry, to which Advanced Micro belongs, has gained 14.6% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings Estimates
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.
Advanced Micro is expected to post earnings of $0.77 per share for the current quarter, representing a year-over-year change of +11.6%. Over the last 30 days, the Zacks Consensus Estimate has changed -1.6%.
The consensus earnings estimate of $2.65 for the current fiscal year indicates a year-over-year change of -24.3%. This estimate has remained unchanged over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $3.63 indicates a change of +37% from what Advanced Micro is expected to report a year ago. Over the past month, the estimate has changed +0.4%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Advanced Micro.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Revenue Growth Forecast
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Advanced Micro, the consensus sales estimate for the current quarter of $6.11 billion indicates a year-over-year change of +9.2%. For the current and next fiscal years, $22.63 billion and $26.06 billion estimates indicate -4.1% and +15.2% changes, respectively.
Last Reported Results and Surprise History
Advanced Micro reported revenues of $5.8 billion in the last reported quarter, representing a year-over-year change of +4.2%. EPS of $0.70 for the same period compares with $0.67 a year ago.
Compared to the Zacks Consensus Estimate of $5.71 billion, the reported revenues represent a surprise of +1.65%. The EPS surprise was +2.94%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
Valuation
No investment decision can be efficient without considering a stock's valuation. Whether a stock's current price rightly reflects the intrinsic value of the underlying business and the company's growth prospects is an essential determinant of its future price performance.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Advanced Micro is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Advanced Micro. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-03
|
AMD
|
The artificial intelligence (AI) market exploded last year, becoming one of the fastest-growing industries. Data from Grand View Research shows the AI market is projected to expand at a compound annual growth rate of 37% through 2030, which would see it exceed a value of $1 trillion before the end of the decade.
So it's no surprise that companies worldwide have restructured their businesses to focus on the budding sector, presenting a variety of investment opportunities. Advanced Micro Devices (NASDAQ: AMD) and Microsoft (NASDAQ: MSFT) are some of the most attractive options, with one making moves in AI chips and the other heavily investing in the software side of the industry.
So let's take a look at whether AMD or Microsoft is currently the better stock for those who want to back the rapidly expanding AI market.
Advanced Micro Devices
Since its founding more than 50 years ago, AMD has become one of the biggest threats in chips. The company hasn't always been first to a market but has proven its ability to carve out a lucrative position in almost any part of the industry with its advanced technology and decisive leadership.
AMD CEO Lisa Su took the helm in October 2014. Since then, the company's shares have soared over 4,000% as it has become a leader in central and graphics processing units (CPUs and GPUs). In fact, AMD's CPU market share has risen from 18% in 2017 to 35% in 2023, gradually chipping away at Intel's share. Meanwhile, the tech giant has attained a significant share of desktop GPUs, second only to Nvidia.
As a result, AMD's expansion into AI strengthens its long-term outlook. Nvidia might have an estimated 90% market share in AI chips, but AMD's past performance suggests it will be able to secure a powerful role in the sector.
AMD will begin shipping its MI300X GPU this year, designed specifically to challenge Nvidia's offerings. The AI chip already has Microsoft's Azure signed on as a customer, with AMD in talks with several other tech companies.
It's still early days for AMD's AI journey, but it's likely to go far in the market in the coming years.
Microsoft
Microsoft got a head start in AI, investing $1 billion in ChatGPT developer OpenAI in 2019. The company has since increased that investment significantly and now boasts a 49% stake in the start-up. Microsoft's partnership with OpenAI has granted it access to some of the most advanced AI models, giving it an edge over rivals like Amazon and Alphabet.
The Windows company has used OpenAI's technology to bring AI upgrades across its product lineup. Its cloud platform, Azure, has expanded its range of AI tools, search engine Bing has been improved with ChatGPT-like features, and various Office productivity services now promise to boost efficiency with the help of AI.
Meanwhile, Microsoft has delivered impressive quarterly earnings. In the first quarter of 2024 (ending September 2023), the company posted revenue growth of 13% year over year, beating Wall Street forecasts by nearly $2 billion. Gains came from considerable growth in its productivity and cloud-related segments, which saw revenue increase by 13% and 19%, respectively.
As the home of brands like Windows, Office, Azure, Xbox, and LinkedIn, Microsoft has a massive user base. Millions of businesses rely on its software, presenting considerable earning opportunities in AI.
Is AMD or Microsoft the better AI stock?
AMD and Microsoft have solid outlooks in AI over the long term. AMD looks poised to shake up the chip market with the launch of its new GPU. Meanwhile, Microsoft has the tech and brand loyalty to become the go-to for anyone looking to integrate AI into their workflow.
However, the charts below suggest AMD might have more stock growth potential over the next two fiscal years.
Data by YCharts
These tables compare AMD's and Microsoft's EPS estimates for the next two fiscal years. According to the data, AMD's earnings could hit $5 per share by fiscal 2026, while Microsoft's will likely reach $15 per share. On the surface, Microsoft looks like a no-brainer.
Yet multiplying those figures by AMD's forward price-to-earnings ratio of 55 and Microsoft's 34 yields stock prices of $275 and $510, respectively. Looking at their current positions, AMD's share would rise 87% and Microsoft's 36% over the next two fiscal years.
As a result, AMD looks like the better AI stock right now and an attractive buy at the start of 2024.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-03
|
AMD
|
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum and price momentum.
ADVANCED MICRO DEVICES, INC. (AMD) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
FUNDAMENTAL MOMENTUM: PASS
TWELVE MINUS ONE MOMENTUM: PASS
FINAL RANK: PASS
Detailed Analysis of ADVANCED MICRO DEVICES, INC.
AMD Guru Analysis
AMD Fundamental Analysis
More Information on Dashan Huang
Dashan Huang Portfolio
About Dashan Huang: Dashan Huang is an Assistant Professor of Finance at the Lee Kong Chian School of Business at Singapore Management University. His paper "Twin Momentum" looked at combining traditional price momentum with improving fundamentals to generate market outperformance. In the paper, he identified seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that he combined into a single fundamental momentum measure. He showed that stocks in the top 20% of the universe according to that measure outperformed the market going forward. When he combined that measure with price momentum, he was able to double its outperformance.
Additional Research Links
Top NASDAQ 100 Stocks
Top Technology Stocks
Top Large-Cap Growth Stocks
High Momentum Stocks
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-03
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Nvidia (NASDAQ:NVDA) stock was arguably the most important one on the market in 2023. Due to its weighting in the S&P 500 and Nasdaq 100 indices, it had a significant impact on their performance. Both set new all-time highs last year.
Nvidia stock gained nearly 240% last year. It was the fifth largest and the second most influential component in the S&P 500 behind Tesla (NASDAQ:TSLA)
It also was the fourth largest and the most influential component of the Nasdaq 100, just ahead of Tesla. The chip maker reached a $1 trillion valuation as a result. Now it’s a matter of when, not if, it hits $2 trillion.
The Bull Case for Nvidia
As the leading semiconductor company specializing in graphics cards and data centers, AI energized Nvidia’s performance.
Its future performance in 2024 depends heavily on ongoing chip demand, its ability to innovate to maintain a competitive advantage, and whether AI has the legs to keep running higher.
There is an excellent case that demand should grow. Businesses want in on AI, which ought to keep Nvidia busy. And PC sales could rebound with the potential for an AI PC being introduced this year. And the gaming market where Nvidia cut its teeth is showing signs of growth once more.
Higher console sales, more games sold, and an increased number of players point to a recovery in the industry. Nvidia’s Q3 gaming revenue jumped 15% sequentially and 81% year over year.
There is plenty Nvidia is doing right, too. Because Arm Holdings (NASDAQ:ARM) technology is so critical to its own, Nvidia invested in Arm’s IPO.
Regulators prevented the two from merging over antitrust concerns, so this backdoor way of ensuring its access is the next best thing. Nvidia’s recently released Grace Hopper H200 AI Superchip is based on Arm’s architecture.
The Bear Case for Nvidia
NVDA stock already embodies the belief all that will fall in the chip maker’s favor. The stock is priced for perfection. Although only trading for 24 times next year’s earnings, it also goes for 27 times sales and 70 times free cash flow.
With the U.S. blocking the sale and transfer of technology and chips to China and competitors nipping at its AI heels, any hiccup could cause NVDA stock to tumble. The country represents 20% of Nvidia’s data center revenue, one of its most important segments.
Nvidia quickly established itself as the leading AI chip stock but Advanced Micro Devices (NASDAQ:AMD) and more recently Intel (NASDAQ:INTC) released competing processors.
The H200 puts Nvidia back in the lead, but does so at a much higher price. Discounting by rivals could jeopardize NVDA’s lead.
While the gaming market did bounce, the PC segment is still in decline. An AI PC might help, but that could be wishful thinking too.
According to analysts, Nvidia has a median 12-month price target of $650, implying 35% upside in the stock. At least one analyst forecasts Nvidia stock will hit $1,100 per share, more than doubling from its current price of $495 per share.
These optimistic projections are based on the assumption that Nvidia will continue to dominate the AI market, which is expected to grow at a 40.2% compounded annual growth rate between 2020 to 2027.
The question is, how long is AI’s growth sustainable? Right now it’s on a rocket ride but that’s based on it continuing to pay dividends for business. If the hoped-for savings and efficiencies don’t materialize, that could cause demand to drop off the table.
The Verdict on NVDA Stock
Although momentum is in Nvidia’s favor, the stock is not a clear buy in 2024. It will be hard to keep the pace of growth going. The clarity needed regarding China is not imminent. Competition is growing and becoming more intense, particularly on the AI side. AI could be a bubble that bursts in 2024 due to regulatory, ethical, or social concerns.
Yet I wouldn’t be selling shares either. Rather, for investors willing to tolerate the volatility and uncertainty in the market, the chip maker is a hold.
Nvidia is a great company with a strong competitive advantage, but its stock is trading at a significant premium. With the saturation of its core markets, I’d be leery of buying more now
On the date of publication, Rich Duprey did not hold (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.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post The NVDA Stock Enigma: Will Nvidia’s Star Shine or Dim in 2024? appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-03
|
AMD
|
The video games market is vast, encompassing a wide range from consoles to PCs, mobile games, handheld devices, and more. Meanwhile, recent developments like microtransactions and subscription-based services have opened new ways for companies to boost revenue.
According to Statista, the industry is valued at about $250 billion, and is expected to expand at a compound annual growth rate of about 9% through 2028. As a result, it's not a bad idea to make a long-term investment in the market and profit from its consistent development.
After all, there's a reason many of the world's most valuable companies, including Microsoft (NASDAQ: MSFT), Nvidia, and Apple, ventured into the lucrative arena. No matter the economic climate, there is almost always demand for new gaming content and hardware upgrades, offering companies and their investors reliable gains over the long term.
Here are three top gaming stocks to buy in January.
1. Advanced Micro Devices
Shares of Advanced Micro Devices (NASDAQ: AMD) are up 127% over the last 12 months as the company impressed Wall Street with its artificial intelligence (AI) efforts. However, long before the company's venture into AI, AMD was a crucial fixture in the gaming community.
The tech giant's computing hardware, including graphics processing units (GPUs) and central processing units (CPUs), is used by gamers worldwide to build high-powered gaming PCs. AMD's chips allow consumers to play demanding titles at far higher settings than possible on consoles.
However, that hasn't stopped the company from also carving out a lucrative role in the console market. AMD is the exclusive supplier of chips to Sony's PlayStation 5 and Microsoft's Xbox Series X|S, two of the best-selling consoles of the last few years.
AMD's success in video gaming pushed revenue in its gaming segment rise 30% to $1.5 billion over the last five years, with operating income up 72% to $208 million.
Data by YCharts
AMD looks too expensive with a forward price-to-earnings ratio (P/E) of 55. However, this table shows AMD's earnings could hit $5 per share by fiscal 2025. Multiplying that figure by the company's forward P/E gives a stock price of $275, projecting growth of 87% over the next two fiscal years.
And with that, AMD is an attractive way to invest in gaming this month.
2. Microsoft
As the home of the Xbox, Microsoft is one of the biggest names in video games. The company launched the brand with its first console in 2001, debuting as an underdog in an industry long dominated by Japanese firms Sony and Nintendo.
However, Microsoft played to its strengths, using its skills in software to approach the market in a unique way. The tech giant was one of the first to launch a video game subscription service with Xbox Game Pass, which landed on the scene in 2017 and has been described as the Netflix for games. Game Pass made Xbox the best-valued console available, allowing gamers to pay one low monthly fee for access to an extensive library of new and old titles rather than paying for games individually.
From 2020 to 2022, the number of Game Pass members rose 150% to 25 million. The platform's success has occurred as Microsoft acquired several game developers to boost content on the service, including purchasing Activision Blizzard (creators of Call of Duty) in 2023.
Microsoft's forward P/E of 33 makes its stock a pricey option. However, as a behemoth in the video games industry, and free cash flow that hit $63 billion in 2023, the company has earned its premium price and is an attractive way to invest in video games this month.
3. Intel
Intel (NASDAQ: INTC) might not be the first company that comes to mind in a discussion about gaming. However, like AMD, the chipmaker's CPUs have been heartily adopted by the video game community to run powerful gaming PCs.
Additionally, in 2022, Intel took steps to diversify its position in gaming with the launch of its first consumer GPUs. Their debut had unfortunate timing, as macroeconomic headwinds had brought down the entire market. However, easing inflation last year suggests gaming GPU demand might be trending up again.
In the third quarter of 2023, Intel's client computing segment (which includes gaming income) posted operating income growth of 43% to $2 billion. The company is on a promising growth trajectory, with excellent prospects in video games over the long term.
Data by YCharts
This chart shows Intel's earnings are projected to reach almost $3 per share over the next two fiscal years. In a similar calculation to AMD, multiplying the figure by Intel's forward P/E of 53 yields a stock price of $140. Considering the company's current position, its shares are projected to deliver growth of 180% by fiscal 2025.
Intel could be one of the smartest ways to invest in video games this January.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Microsoft, Netflix, and Nvidia. The Motley Fool recommends Intel and Nintendo and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-03
|
AMD
|
Chip stocks, including Nvidia (NVDA) and Advanced Micro Devices (AMD) have been on an absolute tear over the last 12 months, as investors remain extremely bullish on the artificial intelligence (AI) megatrend. Both AMD and Nvidia manufacture specialized chips that help power data centers for multiple AI platforms. While Nvidia stock more than tripled in 2023, AMD stock gained 127.6% last year.
www.barchart.com
However, a new analyst note today warns that NVDA could be vulnerable this year as the AI hype cycle tumbles into the so-called “trough of disillusionment” phase. With tech giants taking a dive to start the new year, let’s see which semiconductor stock has more upside potential for investors right now.
The Bull Case for NVDA Stock
Nvidia is well-positioned to benefit from the adoption of generative AI in the upcoming decade. In fiscal Q3 of 2024 (ended in October), Nvidia reported sales of $18.1 billion, an increase of 206% year over year. The majority of these gains were driven by Nvidia’s data center segment.
Despite its massive size, analysts expect the company to increase sales by 118.4% to $59 billion in fiscal 2024 (ending in January) and by 56.5% to $92.3 billion in fiscal 2025.
Comparatively, adjusted earnings per share are forecast to grow by 102.5% annually in the next five years. So, priced at 24.2 times forward earnings, NVDA stock is still quite cheap, given its stellar growth estimates.
Market research company Gartner (IT) forecasts AI chip sales to surge to $67 billion in 2024, an increase of 25% year over year. Nvidia currently has a market share of almost 80% in this vertical, which means the business should generate revenue of around $54 billion in the next 12 months. These numbers could easily move higher if demand for AI chips continues to grow at an exponential rate.
Out of the 35 analysts covering NVDA stock, 30 recommend “strong buy,” three recommend “moderate buy,” and two recommend “hold.” The average target price for NVDA is $653, indicating an upside potential of 37% from current levels.
www.barchart.com
The Bull Case for AMD Stock
Valued at $221.7 billion by market cap, AMD has been among the hottest tech stocks in the past decade, rising a whopping 3,710% since January 2014. AMD’s CEO, Lisa Su, forecasts the data center AI chip vertical to grow from $45 billion in 2023 to $400 billion in 2027, providing it with enough room to grow its top line in the next four years.
In addition to AI, AMD is poised to benefit from growth in its legacy businesses, such as graphics and enterprise processors. Similar to several other tech stocks, AMD wrestled with slowing PC sales, higher costs, elevated interest rates, and lower enterprise spending. It also faced challenges in China, due to restrictions on exports by the U.S. government.
Due to a challenging macro environment, AMD’s sales are forecast to decline by 4% year over year to $22.65 billion in 2023. However, revenue might rise by 16.6% to $26.4 billion in 2024.
Comparatively, adjusted earnings per share is forecast to expand from $2.65 in 2023 to $3.73 in 2024. Priced at 39.5 times forward earnings, AMD trades at a much higher multiple compared to NVDA. However, it's growing at a much slower pace.
Out of the 29 analysts covering AMD stock, 23 recommend “strong buy,” one recommends “moderate buy,” and five recommend “hold.” However, the average target price for AMD is $135.07, which is fractionally below the stock's current levels - suggesting that Wall Street sees more upside ahead for NVDA relative to AMD over the next year.
www.barchart.com
On the date of publication, Aditya Raghunath did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
Following the launch of OpenAI's ChatGPT, generative artificial intelligence (AI) has taken the market by storm, helping send the S&P 500 Index up 25% year to date. Industry leaders such as Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) have been key in helping power the rally because of their fast-growing chip businesses.
Let's discuss why 2024 could be even more exciting for these two AI-related stocks.
1. Nvidia
With shares up a jaw-dropping 246% in 2023, Nvidia is arguably the biggest winner in 2023's AI gold rush. And unlike some other AI companies, its operating performance has surged to match the hype. It isn't too late for investors to bet on Nvidia's continued success because of its reasonable valuation and spectacular margins.
Nvidia's business is shifting from lower-value gaming hardware to high-performance AI chips. And that shift is transforming its operations.
Third-quarter revenue increased by 206% year over year to a record of $18.12 billion, while net income surged by 1,259% to $9.2 billion. This is partially because of a dramatic rise in margin as the company sells more expensive data center chips like the H100, which can cost as much as $30,000 per unit.
Nvidia is also tackling other growth opportunities like China, where U.S. trade restrictions limit the import of some of its most advanced hardware. To comply with the rules, the company has launched slower versions of its Nvidia RTX4090 gaming chip, specifically for Chinese consumers. This move follows a November announcement of plans to develop AI chips customized for the Chinese market.
With a forward price-to-earnings (P/E) growth rate of just 25, Nvidia stock is relatively cheap compared with its projected growth over the next 12 months. To put that number in context, the S&P 500 trades for an average of 26.
2. Advanced Micro Devices
With Nvidia making boatloads of money from its data center chip business, its biggest rival, AMD, is vying for a piece of the opportunity through advanced AI hardware of its own. And while the chipmaker has yet to report significant gains from these efforts, investors can look forward to seeing the business scale up rapidly in 2024 and beyond.
According to AMD's CEO Lisa Su, the market for AI-capable chips will surge tenfold to $400 billion by 2027. To take advantage of the opportunity, the company released the MI300 family of AI chips, which can outperform Nvidia's flagship H100 on key metrics like memory space and inference (running AI platforms).
Image source: Getty Images.
So far, AMD's new products have had no significant impact on the company's performance. Third-quarter revenue increased only 4% to $5.8 billion. However, analysts are optimistic that its new chips will see large-scale deployment in 2024, leading to significant revenue growth.
AMD's valuation is nowhere near as good as Nvidia's, considering its significantly lower growth rate in the near term. In fact, with a forward price-to-earnings (P/E) multiple of 39, its shares are more expensive than its larger rival. However, the situation could change as AMD's AI efforts start supercharging its operating performance.
There's room for two (or more)
While Nvidia and AMD are about to enter direct competition in the market for the most advanced AI hardware, that doesn't mean one company has to lose for the other to win.
As mentioned, AMD's management believes the market for AI chips will surge more than tenfold to $400 billion. That figure is more than 20 times Nvidia's trailing 12-month revenue, leaving plenty of room for both companies to sell these products as fast as they can produce them, even if the market reaches only a fraction of those lofty estimates. Both stocks can continue their bull runs in 2024 and beyond.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Will Ebiefung has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
The artificial intelligence (AI) market exploded in 2023 and shows no signs of slowing. The debut of ChatGPT reignited interest in the sector and forced many to rethink what they thought was currently possible with the technology. As a result, countless companies pivoted their businesses to developing the industry.
Data from Grand View Research shows the AI market is projected to expand at a compound annual growth rate of 37% through 2030. That would see it hit annual sales exceeding $1 trillion before the decade's end. That makes now a great time to invest in this rapidly expanding industry and potentially profit from its promising outlook.
Here are three AI stocks you might want to consider buying hand over fist in January.
1. Advanced Micro Devices
Advanced Micro Devices (NASDAQ: AMD) has an exciting year ahead, with plans to strengthen its role in AI by launching a new chip. The company will begin shipping its MI300X graphics processing unit (GPU) in 2024, designed specifically to challenge Nvidia's dominance.
Nvidia soared to the top of the market in 2023, getting a headstart as it snapped up an estimated 90% market share in AI chips. Its success in the industry highlighted how far chipmakers like AMD are behind when it comes to AI.
However, AMD spent the last 12 months refining its AI technology and it's hoping to make a big splash in the sector this year. As the cost of AI chips rises, the industry is desperate for increased competition and alternatives to Nvidia. Consequently, AMD's MI300X has support from firms across tech, with Microsoft's Azure announcing in December that it will become the first cloud platform to use the new GPU to optimize its AI offerings.
Data by YCharts
The chart above shows AMD's earnings could hit $5 per share by fiscal 2025. When that figure is multiplied by the company's forward price-to-earnings ratio of 55, it gives a stock price of $275, suggesting growth of 87% over the next two fiscal years.
AMD is on a promising growth trajectory and could be one of the smartest investments this month.
2. Intel
Like AMD, Intel (NASDAQ: INTC) is hard at work designing a new AI chip to take on Nvidia in 2024. In December the company unveiled several new additions to its product lineup, including the Gaudi3, which is launching this year and is capable of powering demanding AI models.
Intel has transformed itself over the last few years. A long history of dominance in central processing units (CPUs) saw it grow complacent, leaving it vulnerable to competition. Its CPU market share fell from 82% to 61% between 2017 and 2023 as AMD strengthened its position in the industry. Then in 2020, Apple ended its partnership with Intel in favor of in-house hardware, taking a significant bite out of the chipmaker's earnings.
However, instead of throwing in the towel, the hurdles seemed to light a fire under Intel again. The company unveiled its first consumer GPUs in October 2022, venturing into a new market that would see it go head-to-head with Nvidia and AMD. The move was a smart one in the run-up to the boom in AI, as GPU technology is crucial to its success in the industry over the long term.
Data by YCharts
Intel's massive growth potential is evident in its EPS estimates. This chart shows its earnings are projected to reach nearly $3 per share over the next two fiscal years. In a similar calculation to AMD, multiplying the figure by Intel's forward P/E of 53 yields a stock price of $140. If the estimates hold, the company's shares would deliver growth of 180% by fiscal 2025.
As a result, Intel is absolutely an AI stock worth buying hand over fist this January.
3. Alphabet
Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) enjoyed a glowing 2023. Its digital ad business made an impressive turnaround from the previous year, with revenue rising 11% year over year in its latest quarter (the third quarter of 2023) as it beat analysts' expectations by $980 million.
Meanwhile, the tech giant has exciting prospects in AI. Alphabet's highly anticipated large language model Gemini debuted in early December, and is capable of crunching various forms of data with more sophisticated reasoning than any of the company's previous technology.
Gemini and Alphabet's potent platforms, like Google Search and Android, could prove a powerful combination, presenting countless ways for the company to expand in AI. Alongside free cash flow that rose 29% over the last year to $77 billion, Alphabet has the financial resources and brand loyalty to go far in the industry.
Data by YCharts
Alphabet's biggest competitors in AI are cloud giants Amazon and Microsoft. However, Gemini and Alphabet's massive user base suggests the company has equal, if not more, earnings potential in AI. Meanwhile, this chart shows Alphabet's P/E and price-to-free cash flow are significantly lower than those of its rivals, making its stock a bargain compared to Amazon and Microsoft.
Alphabet likely has a bright future in AI and is a no-brainer investment this month.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
Invesco’s top-performing ETFs in 2023 represented some of the growthiest segments of the market, as stocks broadly showed strength last year.
The Invesco PHLXSemiconductor ETF (SOXQ) and the Invesco NASDAQ Internet ETF (PNQI) were among Invesco’s top-performing ETFs in 2023, trailing only the Invesco Alerian Galaxy Crypto Economy ETF (SATO).
SOXQ notably gained 66.7% in 2023, while PNQI climbed 60.7% during the year. Both funds target high-growth segments of the market, a strategy that rewarded investors in 2023.
Invesco PHLX Semiconductor ETF (SOXQ)
SOXQ is based on the PHLX Semiconductor Sector Index. It measures the performance of the 30 largest U.S.-listed securities of companies engaged in the semiconductor business.
Semiconductors include products such as memory chips, microprocessors, integrated circuits, and related equipment that serve a wide variety of purposes in various types of electronics, including personal household products, automobiles, and computers, among others.
Top holdings in the fund include Advanced Micro Devices (AMD), Broadcom (AVGO), Intel Corporation (INTC), and QUALCOMM (QCOM).
SOXQ charges 19 basis points and has $184 million in assets under management.
Invesco NASDAQ Internet ETF (PNQI)
PNQI invests in internet-related businesses across the cap spectrum included in the NASDAQ CTA Internet index.
PNQI includes companies whose primary businesses include internet-related services including, but not limited to, internet software, internet search engines, web hosting, website design, or internet retail commerce as determined by the Consumer Technology Association (CTA). Top holdings in PNQI include Meta Platforms (META), Microsoft Corporation (MSFT), Alphabet Inc (GOOG), and Amazon.com Inc (AMZN).
PNQI is the pricier of the two ETFs, charging 60 basis points. The fund is also the larger of the two ETFs, with $700 million in assets under management.
For more news, information, and analysis, visit the Innovative ETFs Channel.
vettafi.com is owned by VettaFi LLC (“VettaFi”). VettaFi is the index provider for SATO, for which it receives an index licensing fee. However, SATO is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of SATO.
Read more on ETFTrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
In afternoon trading on Tuesday, Technology & Communications stocks are the worst performing sector, showing a 1.8% loss. Within that group, Advanced Micro Devices Inc (Symbol: AMD) and Uber Technologies Inc (Symbol: UBER) are two large stocks that are lagging, showing a loss of 6.2% and 5.5%, respectively. Among technology ETFs, one ETF following the sector is the Technology Select Sector SPDR ETF (Symbol: XLK), which is down 2.8% on the day, and roughly flat year-to-date. Advanced Micro Devices Inc, meanwhile, is roughly flat on a year-to-date basis, and Uber Technologies Inc, is roughly flat on a year-to-date basis. AMD makes up approximately 2.5% of the underlying holdings of XLK.
The next worst performing sector is the Industrial sector, showing a 1.0% loss. Among large Industrial stocks, Norwegian Cruise Line Holdings Ltd (Symbol: NCLH) and Lam Research Corp (Symbol: LRCX) are the most notable, showing a loss of 7.2% and 3.8%, respectively. One ETF closely tracking Industrial stocks is the Industrial Select Sector SPDR ETF (XLI), which is down 0.9% in midday trading, and roughly flat year-to-date. Norwegian Cruise Line Holdings Ltd, meanwhile, is roughly flat on a year-to-date basis, and Lam Research Corp, is roughly flat on a year-to-date basis.
Comparing these stocks and ETFs on a trailing twelve month basis, below is a relative stock price performance chart, with each of the symbols shown in a different color as labeled in the legend at the bottom:
Here's a snapshot of how the S&P 500 components within the various sectors are faring in afternoon trading on Tuesday. As you can see, six sectors are up on the day, while three sectors are down.
SECTOR % CHANGE
Utilities +1.5%
Healthcare +1.3%
Energy +1.2%
Consumer Products +0.9%
Financial +0.8%
Materials +0.2%
Services -0.1%
Industrial -1.0%
Technology & Communications -1.8%
10 ETFs With Stocks That Insiders Are Buying »
Also see:
Railroads Dividend Stocks
HSP Videos
Funds Holding MAT
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Advanced Micro Devices’ (NASDAQ:AMD) journey in the microprocessor space was volatile in 2023. Fortunately for investors, AMD stock mostly moved up and to the right, finishing the year with an impressive gain of more than 125%.
The company’s Ryzen 8040 Series laptop processors promise a 60% performance boost for AI applications, leading AMD back into the spotlight. AMD’s Instinct MI300 Series accelerators also position the company well to compete in the AI chip field long term.
Additionally, AMD’s MI300 chips position the company as a formidable competitor to Nvidia (NASDAQ:NVDA) in the data center and AI segments. CEO Lisa Su anticipates a $2 billion contribution from these markets in 2024, though some analysts view this projection as conservative. Amid strong competition in 2024, AMD’s innovative AI chip presence is certainly worth considering for investors looking at relative value in this sector.
Here are a few catalysts investors may want to watch right now regarding AMD stock.
New Graphics Card Lineup
In addition to the company’s product lineup, AMD is set to release its Radeon RX 7600 XT. This chip is intended to bridge the performance and pricing gap between the RX 7600 and RX 7700XT. Launching sometime during the week of January 22nd as a rival Nvidia’s RTX 4060 and RTX 4060 Ti chips should gain traction given this chip’s improved VRAM.
AMD will exclusively rely on custom models from partners like Sapphire, XFX, ASUS and Gigabyte for the Radeon RX 7600 XT, bypassing an MBA (Made By AMD) GPU release. While exact specifications remain undisclosed, speculation suggests the GPU might boast 10GB or 12GB of GDDR6 memory, potentially outpacing Nvidia’s RTX 40 series GPUs in VRAM.
Assuming no plans for a Radeon RX 7700 non-XT, speculation is that the RX 7600 XT, likely featuring around 40 Compute Units, will serve as an RDNA 3 replacement for the RX 6700 XT. Utilizing Navi 32 silicon with 10GB or 12GB of VRAM, AMD maximizes its Navi 33 silicon, leaving no untapped resources for the Radeon RX 7600.
The expectation is that any higher-end GPU below the RX 7700 XT will utilize Navi 32 silicon with disabled CUs, eliminating the need for new RDNA 3 GPU silicon.
Confidence Boost from Microsoft and Meta
At an AMD investor event, Meta (NASDAQ:META), OpenAI and Microsoft (NASDAQ:MSFT) announced adoption of AMD’s latest AI chip, the Instinct MI300X. This signals a shift toward alternatives to Nvidia graphics processors in AI, potentially impacting Nvidia’s market dominance.
AMD CEO Lisa Su highlighted the industry’s focus on powerful GPUs for the cloud, discussing the MI300X’s new architecture and key feature—192GB of high-performance HBM3 memory. The comparison with Nvidia’s H100 emphasizes improved user experiences. Still, the challenge for AMD lies in convincing companies accustomed to Nvidia to invest time and resources in adopting an additional GPU supplier. Su acknowledged the effort required for this transition.
AMD upgraded ROCm to rival Nvidia’s CUDA, addressing a key preference among AI developers. Pricing for the MI300X wasn’t disclosed, but Lisa Su emphasized the necessity for cost-effectiveness compared to Nvidia’s chips, which can reach around $40,000.
Buy AMD Now
AMD has swiftly secured major clients for its MI300X chip. Strategic pricing, estimated by Ark Invest at $18,000 to $19,000 to maximize market share, could entice customers away from Nvidia’s pricier alternatives. AMD’s MI300X boasts substantial performance gains over NVDA’s H100, promising cost efficiency for adopters.
Despite Nvidia’s H200 chip being faster, AMD’s integrated software makes this company a formidable competitor in the AI chip race. Additionally, given the company’s relative value compared to Nvidia, I could certainly see much better performance with AMD stock in 2024, all things being equal.
On the date of publication, Chris MacDonald 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.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post 3 Catalysts That Could Take AMD Stock to New Highs in 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
In early trading on Tuesday, shares of Moderna topped the list of the day's best performing components of the Nasdaq 100 index, trading up 16.1%. Year to date, Moderna registers a 16.1% gain.
And the worst performing Nasdaq 100 component thus far on the day is Advanced Micro Devices, trading down 5.3%. Advanced Micro Devices is lower by about 5.3% looking at the year to date performance.
Two other components making moves today are MongoDB, trading down 4.8%, and Warner Bros Discovery, trading up 4.8% on the day.
VIDEO: Nasdaq 100 Movers: AMD, MRNA
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
Among the underlying components of the Russell 3000 index, we saw noteworthy options trading volume today in Advanced Micro Devices Inc (Symbol: AMD), where a total of 535,589 contracts have traded so far, representing approximately 53.6 million underlying shares. That amounts to about 83.7% of AMD's average daily trading volume over the past month of 64.0 million shares. Particularly high volume was seen for the $140 strike call option expiring January 05, 2024, with 24,414 contracts trading so far today, representing approximately 2.4 million underlying shares of AMD. Below is a chart showing AMD's trailing twelve month trading history, with the $140 strike highlighted in orange:
American Eagle Outfitters, Inc. (Symbol: AEO) saw options trading volume of 33,555 contracts, representing approximately 3.4 million underlying shares or approximately 79.6% of AEO's average daily trading volume over the past month, of 4.2 million shares. Particularly high volume was seen for the $19 strike call option expiring January 19, 2024, with 18,036 contracts trading so far today, representing approximately 1.8 million underlying shares of AEO. Below is a chart showing AEO's trailing twelve month trading history, with the $19 strike highlighted in orange:
And Alteryx Inc (Symbol: AYX) saw options trading volume of 22,574 contracts, representing approximately 2.3 million underlying shares or approximately 71.4% of AYX's average daily trading volume over the past month, of 3.2 million shares. Especially high volume was seen for the $30 strike put option expiring April 19, 2024, with 10,005 contracts trading so far today, representing approximately 1.0 million underlying shares of AYX. Below is a chart showing AYX's trailing twelve month trading history, with the $30 strike highlighted in orange:
For the various different available expirations for AMD options, AEO options, or AYX options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
Also see:
ETF Finder
Top Ten Hedge Funds Holding STMP
PXD Options Chain
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The start of a new year is the perfect time for a stock market recap. As 2023 came to a close the U.S. stock market has finally ended on a high note. In the beginning of the year, many market analysts and stock-pickers were worried about the way in which the macroeconomic environment would impact not only the general business environment but also the performance of stocks as a whole. Fortunately, since then, inflation has fallen down precipitously and the global economy appears to be avoiding a calamitous recession, both clear wins for the U.S. Federal Reserve.
Currently, the Nasdaq has risen 43.6% from a year-to-date perspective, and the S&P500 has appreciated 24.2%. Below is a stock market recap on certain stocks and sectors that drove the market this year.
AI Chip Stocks: AMD (AMD) and Nvidia (NVDA)
Source: graphicINmotion/Shutterstock
Of course, Nvidia (NASDAQ:NVDA) has been one of the best-performing stocks of 2023, with its staggering gain of more than 239.0% year to date. The chipmaker’s shares catapulted earlier in the year after OpenAI released its now famous ChatGPT conversational AI. Since then, Nvidia has been riding high on the booming demand for its artificial intelligence solutions, which continue to power some of the most advanced applications in the world.
Advanced Micro Devices (NASDAQ:AMD) is already getting ready to release its MI300x GPU chipset, which was announced in the second quarter of 2023. The company expects to sell $2 billion in AI chips in 2024, potentially breaking up Nvidia’s monopolistic stranglehold on the AI chip market. AMD shares have more than doubled in value since the start of the year. All in all, next year could exciting year for both stocks.
IonQ (IONQ)
Source: Amin Van / Shutterstock.com
IonQ (NYSE:IONQ) is the first pure-play quantum computing firm, and the company uses trapped ion technology to build its quantum computers. While the quantum computing firm is still technically pre-revenue, the company has worked hard to market its quantum computing services. For example, IonQ has been able to partner with Amazon Web Services and other cloud providers to offer its quantum computing services on public cloud networks. Similarly, IonQ released two quantum computing solutions in October, IonQ Forte Enterprise and IonQ Tempo. These solutions are tailored for both businesses and governments to integrate quantum capabilities within their existing infrastructure.
The hype around artificial intelligence has certainly spilled over into companies operating in the quantum computing space, as there is a lot of intersection in terms of applications. As a result, IonQ shares have risen 259% YTD, clearly ending the year as a top performer.
US-listed Brazilian Companies
Source: Shutterstock
Perhaps unbeknownst to many, there are a number of US-listed companies with headquarters in Brazil that have had a terrific year. When doing a stock market recap for 2023, the first that immediately comes to mind is Petrobras (NYSE:PBR), the state-run oil and gas behemoth. The stock has risen 87.5% year-to-date due to elevated energy prices and less than expected market interference from current President Luiz Inacio Lula da Silva’s government. As war rages on in the Middle East and OPEC production cuts remain in place, oil prices could remain elevated in the near term, and Brazilian oil companies could continue to pick up the tab on providing oil to the rest of the world.
The Warren Buffet-backed Nubank (NYSE:NU) has also had an outstanding 2023, not only in terms of share price appreciation but also strong YOY revenue and customer growth. In particular, revenue growth in Q3 2023 came in at around 53% YOY. Despite higher interest rates, which could have negatively affected the demand for credit cards and personal loans, Nubank’s credit card and personal loan portfolios have instead expanded to $15.1 billion, up 48% YOY, while deposits totaled to $19.1 billion.
Shares in Embraer (NYSE:ERJ), the commercial and defense aircraft designer and manufacturer, have risen 68.2%. The release of its new passenger jet, the E195-E2, and the subsequent $1.2 billion sell of which to Porter Airlines has helped the aircraft company build backlog and gain traction in the space.
On the date of publication, Tyrik Torres did not hold (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.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post The Year That Was: Analyzing 2023’s Top Performing Stocks and Sectors appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
AMD (NASDAQ: AMD) stock lost ground Tuesday -- the first trading day of 2024. The semiconductor specialist's share price ended the day down 6%, according to data from S&P Global Market Intelligence.
AMD stock fell on news that ASML had halted shipments of its lithography machines for semiconductor fabrication to China. ASML's decision reportedly stemmed from pressure applied by the U.S. government.
In addition to the big semiconductor-industry news, tech stocks also fell after Barclays analyst Tim Long downgraded the investment company's rating on Apple stock from "neutral" to "underweight." Long lowered his one-year price target on Apple from $161 per share to $160 per share citing a less favorable outlook for the iPhone line and potential weakening for the company's services business.
Is AMD stock a buy after today's sell-off?
Today's big pullback for AMD stock highlights some of the key valuation threats facing the tech sector -- and growth-dependent chip stocks in particular. In terms of AMD's business-performance outlook, the ASML news looks much more significant than the ratings downgrade for Apple stock from Barclays.
Tensions continue to rise between the U.S. and China, and the semiconductor industry has become a central battleground in the competition between the two world powers. While the U.S. has made moves to limit China's ability to purchase and manufacture high-performance artificial intelligence (AI) chips, China has indicated that it plans to bring Taiwan back under its territorial control.
Given that AMD relies on chip-fabrication services from Taiwan Semiconductor Manufacturing, the fraught geopolitical situation remains a key risk factor for the company.
Following surging interest in AI technologies and momentum for the broader semiconductor space, AMD stock has also been pushed up to a much more growth-dependent valuation.
AMD PE Ratio (Forward 1y) data by YCharts.
While AMD's stock has posted explosive gains over the last year, the business's recent performance has been less impressive. Revenue rose 8% year over year in the third quarter, while non-GAAP (adjusted) earnings per share were up 21%. The semiconductor specialist's business performance hasn't been bad, but it's important to keep in mind that the 114% increase for its share price over the last year has been aided significantly by excitement about future opportunities in AI.
Ultimately, I do think that AMD has what it takes to be a worthwhile long-term investment. The company looks poised to continue gaining market share from Intel in the central processing unit (CPU) and server markets, and it may also be able to gain some ground against Nvidia in the graphics processing unit (GPU) space that is central to the AI race.
AMD has the potential to be a big winner, but investors should keep in mind that the stock's outlook is much more speculative after a year of explosive gains.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ASML, Advanced Micro Devices, Apple, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
Wall Street is ending 2023 on a high note. The technology-heavy Nasdaq Composite gained about 43% in 2023. It may rise even higher in the coming months, driven mainly by positive economic indicators such as higher-than-expected corporate earnings and third-quarter gross domestic product (GDP) growth that surpassed most forecasts.
A potential economic recovery makes it easier for technology companies to access capital for disruptive innovations. Not surprisingly, being composed of many innovative-technology stocks, the Nasdaq Composite will benefit significantly in the case of an uptick in economic activity in 2024.
Artificial intelligence (AI) has been the hottest investment theme in 2023, and is poised to remain a major trend in 2024. Improvement in the economic landscape may drive up share prices of many AI stocks in the coming months. Hence, it makes sense to pick up small stakes in some fundamentally strong AI stocks with well-proven monetization models. Here's why Advanced Micro Devices (NASDAQ: AMD) and Super Micro Computer (NASDAQ: SMCI) fit the bill.
Advanced Micro Devices
The first name on my AI stock list is leading chip designer Advanced Micro Devices (NASDAQ: AMD) -- a stock that has gained almost 130% in 2023. This semiconductor giant needs no introduction, especially since the company has been frequently in the news for its advances in the field of graphic processing units (GPUs) and central processing units (CPUs).
AMD expects demand for AI infrastructure in cloud, enterprise, embedded, and personal computing use cases to grow rapidly in future years. The company has also estimated the target addressable market of the data-center accelerator market to grow annually at more than 70% and reach $400 billion by 2027.
AMD's recently launched Instinct™ MI300 family of accelerators, optimized for power-intensive AI and high-performance computing (HPC) workloads in data centers, seem well positioned to capitalize on this growing opportunity. Chief Executive Officer Lisa Su claimed that while MI300 chips are comparable to Nvidia's H100 chips in training large language models (LLMs), they are 1.4 times better in performance for inferencing (real-time running) models. Further, the company is also striving to ensure a sufficient supply of MI300 chips to meet the rising demand from cloud and enterprise segments. AMD expects MI300 revenue to surpass the $2 billion target in 2024.
Besides MI300 chips, AMD is also focusing on offering a broad range of other energy-efficient GPUs, CPUs, and adaptive computing solutions for training and inferencing LLMs. The company is also working to develop networking solutions that can orchestrate across multiple GPUs for AI applications.
AMD has further developed a robust, open, proven, and developer-friendly software ecosystem for GPU computations called the ROCm (Radeon Open Compute) software stack. This includes frameworks, libraries, compilers, drivers, developing tools, and APIs (application programming interfaces) that support multiple programming models. ROCm is further supporting the adoption of AMD's chips in the AI and high-performance computing (HPC) markets.
Besides strength in its AI business, AMD's core server CPU business and personal computing business are also showing signs of improvement. In the third quarter, the company's fourth-generation Epyc server processor revenue was up sequentially by more than 50%. The company also witnessed rising demand for its Genoa and Bergamo chips from hyperscale customers. Furthermore, the company reported a solid 50% sequential growth in its client segment in the third quarter.
Considering the future growth potential in the AI business and the strength of its core offerings, AMD can be a great stock to buy ahead of more Nasdaq gains.
Super Micro Computer
The second stock on my list is Super Micro Computer, a leading provider of high-end server and storage systems, which has emerged as a major beneficiary of the explosive growth in the AI market. The company reported a surge in demand for its LLM-optimized AI platforms, especially for Nvidia's HGX-H100 server building block integrated into its servers, in the first quarter of fiscal 2024 (ended Sept. 30).
SMCI is also gearing up to monetize its new AI-optimized server offerings based on Nvidia's GH200 Grace Hopper Superchip, AMD's MI250 and MI300 family of chips, and Intel's Gaudi 2 CPU. Being the first to market advanced servers with the latest silicon chips gives the company a solid edge against the competition.
Super Micro has been quite successful in differentiating its products from other mass-produced servers, mainly due to its "building block" or modular approach of assembling proprietary chips and networking technologies into servers. Unlike traditional servers, which require a significant overhaul to suit different applications and technology upgrades, SMCI's highly configurable servers enable customers to easily scale or replace components, at minimal cost. The company's liquid cooling technology also allows better energy utilization and thermal management of its datacenter server and storage solutions. Considering the high-power consumption and thermal challenges posed by AI-optimized servers, SMCI's energy efficiency solutions are helping bring down data-center costs. The company is now expecting 20% of the total data-center deployments to opt for its liquid cooling technology.
Besides the AI training market, Super Micro is also benefiting from rising demand for servers in telecommunication-optimized edge computing products and AI inferencing platforms.
Despite the many pros, Super Micro currently trades at only 2.2 times trailing-12-month sales -- quite reasonable considering that analysts on average expect the company's revenue to grow 51% year over year to $10.76 billion in fiscal 2024 (ending June 30, 2024). Hence, Super Micro seems to be a compelling pick now.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Manali Bhade has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Intel and Super Micro Computer and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
If artificial intelligence (AI) was the story of 2023, then Nvidia (NASDAQ: NVDA) was the stock of the year.
No other company's products were as in demand from the generative AI boom, and no other company has the financial performance to prove it. Nvidia stock finished 2023 up 239% last year, crossing the trillion-dollar mark to become only one of five U.S. stocks to have a valuation above that line. The business also delivered phenomenal growth on the top and bottom lines.
In its third quarter, revenue jumped 206% to $18.12 billion, and its net income according to generally accepted accounting principles (GAAP) jumped more than thirteenfold to reach $9.24 billion, giving it a margin of more than 50%.
Heading into 2024, Nvidia looks to be in great shape for even more growth. Its AI-focused H100 accelerators are in such high demand that prices for them have skyrocketed, and there's a shortage of its GPUs and other components used for its AI models.
The spoils of the AI boom are likely to spill over to other companies in 2024, and while Nvidia may retain its lead in AI chips, other chip stocks could narrow the gap. Here are three that could outperform the AI chip leader in 2024.
Image source: Getty Images.
1. Advanced Micro Devices
If any semiconductor company is going to pose a challenge to Nvidia in AI capabilities, it seems likely to be Advanced Micro Devices (NASDAQ: AMD).
The company's launch of its Instinct MI300 AI accelerators in December was highly anticipated, and the stock jumped 10% on the launch presentation, a sign Wall Street liked what it saw.
Among the customers for the new component are Dell, Hewlett-Packard Enterprise, Lenovo, Microsoft, and Oracle, among others. AMD also said the Instinct Platform can offer a throughput increase of 60% for running inference on large language models compared with the Nvidia H100 HGX.
AMD also made a number of acquisitions in the AI space recently. It acquired AI software leader Mipsology and Nod.ai, an open-source AI software expert, which will help it accelerate its deployment of AI solutions.
AMD stock was no slouch in 2023. The stock jumped 128%. But expectations in 2024 are still modest, with the consensus calling for 16% revenue growth. If its new products take off, AMD could easily top that forecast and the stock could soar.
2. ACM Research
ACM Research (NASDAQ: ACMR) is a relative unknown in the semiconductor sector. The company doesn't make chips, but instead makes machines that clean semiconductor wafers, an important process to ensure that these tiny components don't make errors.
That position in the value chain makes ACM something of a picks-and-shovels play in the sector, but it also stands to benefit from the AI boom, since cleaning requirements are likely to become more technical as chips become more advanced and AI components become more in demand.
ACM Research is a small company, with a market cap of $1.2 billion, but its recent results are impressive. Revenue rose 26% to $21.3 million, with a 31% increase in shipments even during a cyclically challenging period in the semiconductor industry. On the bottom line, adjusted net income rose 33% to $37.5 million.
ACM is mostly focused on China, where it's considered a domestic supplier. That could give it an advantage at a time when a tech cold war between the U.S. and China is heating up, with the U.S. banning the export of some advanced technologies to China.
The stock is cheap at a price-to-earnings ratio of 15, so it shouldn't take much to drive the stock higher in 2024, even after it gained 154% in 2023.
3. Taiwan Semiconductor
Finally, Taiwan Semiconductor (NYSE: TSM) also looks poised for a strong performance in 2024.
Taiwan Semiconductor, also known as TSMC, is the world's largest contract semiconductor foundry, handling roughly half of semiconductor manufacturing for companies including Apple, Qualcomm, Broadcom, AMD, Nvidia, and Intel.
AI makes up about 6% of the company's revenue, but given the company's strong position in chip manufacturing and even larger market share in the manufacturing of advanced chips, it should see steady growth ahead from increasing AI demand.
Like other semiconductor companies, TSMC is fast at work increasing capacity to handle demand for AI production. That momentum may already be starting to build, given that revenue in October jumped 16% from the year before.
Compared with the chip designers, TSMC stock is also affordably priced, at a price-to-earnings ratio of 20. With a broader recovery in the chip sector expected in 2024, TSMC could be a big winner.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Advanced Micro Devices wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Jeremy Bowman has positions in ACM Research and Broadcom. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Microsoft, Nvidia, Oracle, Qualcomm, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Broadcom and Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
Yes, $1 trillion is a huge amount of money. It can, however, be hard to grasp exactly how big it is. So, here's an example:
Imagine that $1 million was deposited into your bank account. Nice, right?
Now, imagine deposits continued every hour, on the hour, every day and continued -- nonstop -- for 50 years.
After all that time, you'd have $438 billion, a gargantuan amount of money. But to get to $1 trillion, the deposits would have to continue for another 65 years.
To put it another way, it would take 115 years to accumulate $1 trillion in this fashion.
Simply put, $1 trillion is an astoundingly large amount of dough. And yet, there are now five publicly traded American companies with market caps over $1 trillion. What's more, the two biggest -- Apple and Microsoft -- have market caps of $3 trillion and $2.8 trillion, respectively.
Undoubtedly, many more companies will cross the $1 trillion mark in the years to come. And there's one I believe can get there by 2028: Advanced Micro Devices (NASDAQ: AMD).
Image source: Getty Images.
AMD's market cap is growing at a staggering pace
Why do I think AMD can cross the $1 trillion mark by 2028? For starters, let's look at AMD's market cap today. As of this writing, AMD has a market cap of $238 billion, making it the 29th largest U.S. company, sandwiched between Salesforce and PepsiCo.
So, to reach $1 trillion by 2028, AMD would need to grow its market cap at a compound annual growth rate (CAGR) of 50% over the next four years:
YEAR MARKET CAP IN BILLIONS (WITH 50% GROWTH RATE YOY)
2024 $238
2025 $357
2026 $536
2027 $803
2028 $1,205
Data source: Author's calculations. YOY = year over year.
That would be an impressive feat, but consider this:
AMD has grown its market cap over the last five years at a CAGR of 68%, rising from $17 billion in 2019 to more than $238 billion as of this writing.
AMD Market Cap data by YCharts
In other words, AMD just needs to maintain its market cap growth to hit the $1 trillion mark by 2028. That won't be easy, but it's certainly achievable.
AMD could ride the artificial intelligence wave to a $1 trillion valuation
What makes it possible -- perhaps even likely -- is the wild growth of the artificial intelligence (AI) market. As AMD CEO Lisa Su noted in a recent interview:
The AI market over the last year has just exploded. ChatGPT has really changed our perspective for what Generative AI can do. ... We originally thought the total market for data center AI accelerators would be about $150 billion [in 2027]. Now, we think it will be over $400 billion.
That's eye-popping growth, and it stands to be an enormous tailwind for AMD. Currently, the company generates roughly a quarter of its revenue from its data center unit. However, with demand for AI accelerators through the roof, that segment should see enormous revenue growth in the coming years -- in particular, due to the recent debut of its new adaptive processing unit chip, the MI300.
Image source: The Motley Fool.
In short, AMD is a company with the wind at its back. The AI revolution is just getting started, and for it to keep rolling on, many AI chips will be needed. And while AMD hopes to compete head-to-head with Nvidia for AI chip supremacy, there's plenty of room for both. And in time, AMD might just join Nvidia in the $1 trillion market cap club.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Jake Lerch has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Microsoft, Nvidia, and Salesforce. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-02
|
AMD
|
Semiconductors are the foundation upon which artificial intelligence (AI) thrives, but knowing that is only part of the battle. For investors using ETF to access chip stocks, some homework could pay dividends regarding identifying the chip ETFs with the most AI relevancy.
The VanEck Semiconductor ETF (SMH) is among the ideas that come to mind. The $11.7 billion SMH turned turned 12 years old in December. It was higher by nearly 73% as of December 26. That's a stellar performance to be sure. And it's one that’s been fueled in part by the fund’s robust AI adjacency.
As a semiconductor play on AI, SMH’s construction is highly pertinent to interested investors. Three of the most widely held stocks by AI and big data funds, including ETFs, are Advanced Micro Devices (AMD), Nvidia (NVDA) and Taiwan Semiconductor (TSM). That trio represents three of SMH’s top four holdings.
Moats Matter
Nvidia and Taiwan Semiconductor combine for 28.46% of the SMH roster. That’s relevant on multiple levels, not the least of which is Nvidia is viewed as one of the most AI-relevant stocks, particularly in the chip space.
Still, SMH’s more than 9% weight to Taiwan Semiconductor shouldn’t be glossed over. After all, that company is the largest chip foundry operator in the world. That means that as demand for AI chips increases, so will demand for Taiwan Semiconductor’s services. That speaks to Taiwan Semiconductor’s status as a wide moat company -- a trait shared with Nvidia.
“Companies with economic moats could be more likely to benefit and may be less susceptible to disruption from AI than those without moats. Moats based on a combination of customer switching costs, unique datasets, and brands could be particularly valuable,” noted Morningstar. “Companies with durable advantages could use AI to improve their products and services and strengthen their competitive positions.”
Competitive Advantages Have Myriad Appeal
The durable competitive advantages possessed by Nvidia and Taiwan Semiconductor are appealing for other reasons. As Morningstar points out, companies with that trait are usually profitable. They usually generate significant amounts of free cash flow. That could be advantageous in turbulent economic climates. Overall, SMH remains a valid AI consideration. That's particularly so for market participants that want to eschew stock-picking in a still-evolving niche.
“Artificial intelligence is an exciting theme, and we expect a lot of market interest in 2024. One effective way to access the AI theme without paying huge valuation premiums is via second-derivative plays. These are not the chipmakers or those that offer technology interfaces. Rather, it's those who can effectively embed AI into their workflow and drive new revenue growth opportunities. The principles of good investing still apply,” concluded Morningstar.
For more news, information, and analysis, visit the Beyond Basic Beta Channel.
Read more on ETFTrends.com.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-01
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
2024 promises to be a lucrative year in the stock market for many reasons. First of all, the Federal Reserve is on track to begin easing off in its efforts to cool an overheated economy. Interest rates are set to decrease with multiple projected cuts on the horizon.
Beyond that though, the world continues to evolve at a rapid pace with multiple megatrends promising to galvanize strong growth. Perhaps none is more salient and influential than artificial intelligence. However there are many other trends to consider including sustainability, mobility, demographics, geopolitics and more. The biggest trends, the so-called megatrends, are particularly worth paying attention to.
Joby Aviation (ACHR)
Source: T. Schneider / Shutterstock.com
A recent article in Forbes demonstrates why investors should be inherently interested in Joby Aviation (NYSE:ACHR) and its stock. The article paints a picture of an airline passenger who has just disembarked from a Hypersonic flight taking 2 hours from New York to London. That passenger then jumps into an urban air mobility drone, avoiding rush hour traffic, and arrives home in 20 minutes.
Urban air mobility has emerged as one of the megatrends to pay attention to in 2023. Firms including Joby Aviation are developing electric vertical takeoff and landing vehicles (eVTOLs) at a rapid pace. These firms have established strong relationships with airline companies, Joby with Delta (NYSE:DAL), that promise to revolutionize commercial flight.
The company undertook exhibition flights in New York City in November. The company expects to drastically decrease the time required to and from major airports in the area. For example, it anticipates that a flight to JFK from the surrounding boroughs will decline from 1 hour to 7 minutes. Joby Aviation continues to demonstrate the volume potential of its operations at airports. Joby recently demonstrated that it would be possible to operate 120 flights per hour in and out of busy airports.
Lithium Americas (LAC)
Source: Wirestock Creators / Shutterstock.com
Lithium Americas (NYSE:LAC) Is another stock to consider that leverages the drastic changes occurring across the field of mobility. Electric vehicles continue to displace internal combustion engine vehicles although their growth has not been linear. I am, of course, referring to the recent collapse in lithium prices and EV sales.
In short, the electrification of vehicles is not going to stop. EV adoption is still relatively early overall but investors should rest assured the industry is not dying. Lithium did however face a steep price correction in 2023 that saw prices decline by 80%. However with every decline there is always a chance of rebound. Current expectations are that the rebound in lithium prices will begin either in 2024 or perhaps 2025.
That coincides quite well with Lithium Americas and its future production plans. The company owns the rights to Thacker Pass which is the largest lithium deposit in the Western hemisphere. Lithium Americas commenced construction in June of this year and anticipates lithium mining operations to start sometime in 2026. It isn’t hyperbolic to suggest that investing in Lithium Americas could produce 10x returns.
Nvidia (NVDA)
Source: Sergio Photone / Shutterstock.com
Nvidia (NASDAQ:NVDA) could pop up on any megatrend stock list for a number of reasons. The company is intimately connected with all things technological being that it is the leading producer of the most in-demand chips. Primarily though, Nvidia promises to provide a strong start to 2024 because of artificial intelligence.
Of course, artificial intelligence is a megatrend that has taken off in 2023. Its rapid emergence has turned Nvidia into an even more important company. As strong as Nvidia’s performance has been in 2023, 2024 appears to be just as strong. The analysts covering Nvidia’s shares anticipate that prices could rise by 50% again, if not more.
Nvidia has cornered the market for AI chips and demand for its h100 chips has been staggering. That said, the company is expected to launch its updated h200 chips in 2024 that promise to further consolidate its lead over the AI field.
AMD (AMD)
Source: JHVEPhoto / Shutterstock.com
AMD (NASDAQ:AMD) has to be the other stock to consider in relation to the artificial intelligence megatrend. While the company continues to play second fiddle to Nvidia, it has emerged as a legitimate competitor.
Back in mid-November the company announced an event to introduce its MI300 GPU accelerator. Then, weeks later, in early December the company released the new chips which will be available in 2024. The news has sent AMD shares from just below $100 to nearly $150 as I write this.
It has become clear that major companies are very interested in AMD’s chips for their application to artificial intelligence. Major purchasers including Microsoft (NASDAQ:MSFT) and Meta Platforms (NASDAQ:META) have noted that they are willing to switch from Nvidia’s h100 chips to AMD’s mi300 chips once they are available. The news is a clear indication that major tech firms believe in AMD and are also frustrated with Nvidia for its pricing. Overall though, it’s a strong indication that AMD is going to remain as a potent challenger in the AI conversation.
Qualcomm (QCOM)
Source: Akshdeep Kaur Raked / Shutterstock.com
Qualcomm (NASDAQ:QCOM) is another important tech company that touches on many of the megatrends of the near future. The stock is a wise choice for many reasons including its stability and dividend as well as its relationship with Apple (NASDAQ:AAPL).
For the purposes of this conversation though, I’ll be talking about Qualcomm in relation to its 5G business. 5G is one of the mega trends that has emerged over the past few years. It promises to rapidly increase the speed of communication and the degree of connectivity. The push toward greater and greater connectivity is not going to slow and it is estimated that $20,000 satellites will be launched this decade in order to facilitate that increased connectivity.
Qualcomm notes that 5G is imperative for the Continue development of the digital economy. In fact, the company believes that the overall value associated with 5G will exceed $13 trillion by 2035.
IBM (IBM)
Source: shutterstock.com/LCV
IBM (NYSE:IBM) Has emerged as the company that is most closely associated with the development of quantum computing. Quantum computing is a nascent technology that promises to fundamentally change computing overall. The field leverages quantum mechanics to solve problems that are too complex for current classical computers to solve.
Quantum computing is an incredibly complex field and those who would like to learn more about it should do so through this link.
The important thing to understand for the layman investor like myself is that IBM is the leader in quantum computing. Thus, if any company is best positioned to take advantage of this megatrend, IBM is it.
IBM’s industry-best qubit count is expected to more than quadruple by 2025. The company is developing quantum computing hardware as well as software including the cloud-based quantum computing services. If quantum computing lives up to its billing then IBM can grow rapidly. For now, current investors can get a dividend that yields more than 4% making IBM shares attractive for income investors and those looking for future growth.
MercadoLibre (MELI)
Source: rafapress / Shutterstock.com
MercadoLibre (NASDAQ:MELI) often enters discussions that relate to e-commerce and fintech stocks. It’s probably the clearest example of a company that is showing strong results in both regards. The company has emerged as the dominant force in Latin American e-commerce and created a strong, rapidly growing payments platform in the process.
MercadoLibre’s results in that regard are incredibly impressive. During the third quarter, revenues increased by more than 69%, reaching $3.8 billion. Meanwhile, gross payment volume grew by 121% to $47.3 billion. And while Mercado Libre deserves recognition for those results, there are other megatrends that I want to focus on.
Instead, it is the megatrend of emerging markets. Economists continue to note that emerging markets have vast untapped potential. World superpowers including the United States and China face significant problems which has led investors to look at emerging markets with a greater focus. Thus, firms like MercadoLibre are well positioned due to their exposure to the emerging market trend as well as those in fintech and commerce.
On the date of publication, Alex Sirois 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.
More From InvestorPlace
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The #1 AI Investment Might Be This Company You’ve Never Heard Of
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post 7 Megatrend Stocks to Buy for a Mighty Start to 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-01
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
As it stands now, six U.S.-listed stocks are in the “trillion dollar club,” or stocks with a market cap of at least $1 trillion. In the coming year, or in the years ahead, which other mega-cap stocks (stocks with a market cap of $200 billion or more) will join them and become the next trillion-dollar companies?
That’s a question on the minds of many investors. Technological breakthroughs in areas like artificial intelligence and electric vehicles point to several companies “joining the club.”
So, too, do breakthroughs/long-term trends in other areas, like healthcare and financial services. There are also mega-cap companies that, while growing at only a moderate pace, are within reach of hitting the trillion-dollar mark within this decade.
With this in mind, let’s take a look at seven companies that appear most likely to become trillion-dollar stocks and when exactly each of them can reach this milestone.
Advanced Micro Devices (AMD)
Source: Fabio Alcini / Shutterstock.com
When it comes to the next chip stock to join Nvidia (NASDAQ:NVDA) in the trillion dollar club, Advanced Micro Devices (NASDAQ:AMD) is a name that to many may first come to mind. Yet, while the chip designer is currently making its own big moves in AI chips, reaching a $1 trillion market cap may be easier said than done.
AMD stock currently has a market cap of around $236 billion. Hence, shares need to surge more than fourfold to join the trillion-dollar club. With AMD rising eightfold over the past five years, quadrupling in price should be a cinch, right?
Not necessarily. Due to this year’s ‘AI mania,’ AMD’s AI catalyst appears to be priced in and then some. Unless the company’s AI endeavors result in earnings many times that of current estimates, even reaching trillion-dollar status by 2030 may be, at best, a stretch.
Broadcom (AVGO)
Source: Sasima / Shutterstock.com
AMD may not be on the fast track to becoming one of the next trillion-dollar companies, but another semiconductor firm might be. It is Broadcom (NASDAQ:AVGO). Why? AVGO is already more than halfway there, with a market cap of $527.2 billion.
Furthermore, as argued previously, AVGO stock may have a far greater runway than other top AI stocks. Valuation is a big reason for this. AVGO trades at a forward multiple in the low 20s. “Magnificent Seven” AI stocks trade for 30-40 times forward earnings.
Also, Broadcom could eke out billions in cost/growth synergies from its recent VMware merger, enabling the company to beat current earnings growth expectations. To reach a $1 trillion market cap, all AVGO needs to do is rise in value by just under 90%. A mix of multiple expansion and earnings growth could get it there sooner than you think.
Berkshire Hathaway (BRK-A, BRK-B)
Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B), legendary investor Warren Buffett’s investment vehicle, is even closer than AVGO to reaching the trillion-dollar threshold. The Omaha, Nebraska-based conglomerate currently has a market cap of $777.9 billion.
This means all BRK.A/BRK.B stock needs to do is rise by 28.5% to achieve this valuation goal. Given the mostly “old economy” nature of Berkshire and its various businesses/holdings, not to mention its huge size, you may think that reaching a trillion is, at best, several years away for the company.
However, as a Seeking Alpha commentator recently argued, the “road to $1 trillion” may not be as long as it seems. Per the commentator, even if growth among Berkshire’s businesses screeched to a halt, adding these stagnant cash flows to the company’s war chest would still justify a move to a $1 trillion valuation.
Eli Lilly (LLY)
Source: shutterstock.com/Michael Vi
Admittedly, Eli Lilly (NYSE:LLY) may be the most questionable candidate to become one of the next trillion-dollar companies. Shares in the big pharma firm have surged to a valuation of $522.4 billion thanks to the massive potential of its drug candidate, Zepbound.
While initially developed as a treatment for diabetes under the Mounjaro name, Eli Lilly has been working to get Zepbound approved as an obesity treatment. Given Novo Nordisk’s (NYSE:NVO) success with its Ozempic/Wegovy obesity treatment, it’s no surprise that Wall Street is very bullish on LLY stock.
Yet while further positive news regarding Mounjaro/Zepbound may lead to further gains for LLY, with shares trading for 88.4 times earnings, one can argue that the future growth potential of this and other obesity treatments is already priced into the stock. Hence, you may want to tread carefully with this trillion-dollar contender.
Meta Platforms (META)
Source: Cat Box / Shutterstock.com
With a market cap of $919.7 billion, it may be a matter of months, not years, before Meta Platforms (NASDAQ:META) becomes one of the next trillion-dollar stocks. In fact, as I argued recently, shares in the Facebook and Instagram parent could climb to a value well above $1 trillion during 2024.
Put simply, a combination of earnings growth, further progress with the company’s AI efforts, plus greater appreciation of Meta’s AI bona fides could result in META stock (at around $360 per share today) rallying to $500 or $600 per share.
In other words, it’s within the realm of possibility that Meta Platforms will become a $1.5 trillion (by market cap) company within a year. That’s a valuation that would put Meta’s valuation in the same ballpark as other trillion-dollar club members like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN).
Tesla (TSLA)
Source: Arina P Habich / Shutterstock.com
It may be strange to say that Tesla (NASDAQ:TSLA) is one of the next trillion-dollar companies. Mainly because the EV industry leader was, at one point, a trillion-dollar company. In October 2021, just before the 2021-2022 stock market downturn, TSLA attained a market cap exceeding $1 trillion.
The stock experienced a massive drawdown from late 2021 through January 2023. Following this, a massive rebound throughout 2023. As a result, TSLA stock is back to a market cap of around $804.8 billion. All that’s necessary to send Tesla back to trillion-dollar status is a 24.25% move higher.
Even as Tesla skeptics point to issues like the EV sales slowdown as signs that TSLA will slide lower in 2024, as I pointed out last week, a potential catalyst could supercharge shares later in the year: the debut of a low-priced, mass-market Tesla EV model.
Visa (V)
Source: Kikinunchi / Shutterstock.com
Visa (NYSE:V) is another mega-cap that’s halfway towards the trillion-dollar market cap mark. Shares in payment technology companies have produced outsized long-term returns for investors since the stock’s debut in the late 2000s.
Following an incredible run from a split-adjusted $15-$20 per share in early 2008 to around $260 per share today, some may expect V stock to produce more modest returns from here. However, the move from cash-based to card/digital-based transactions continues. This company also continues to benefit from having a deep economic moat. It is not far-fetched to think that Visa could continue reporting double-digit annual earnings growth in the years to come.
In short, Visa is one of the “it’s a matter of when, not if” trillion-dollar contenders. With this, plus the stock’s reasonable valuation (26.3 times earnings) compared to growth forecasts, consider making it a long-term buy.
On the date of publication, Thomas Niel did not hold (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.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post 2024’s Power Players: 7 Stocks Racing to a Trillion Valuation appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-01
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Driven by large opportunities in artificial intelligence in particular and a general recovery of the chip market, AMD (NASDAQ:AMD) stock could very well outperform the S&P 500 and the Nasdaq in 2024. But on the other hand, the firm’s valuation appears to bake in continued, large market share gains by AMD at Intel’s (NASDAQ:INTC) expense, and that scenario may very well not materialize. Given these points, I rate AMD stock as a “hold” at this point, and I view INTC as a much better alternative.
This article will walk the reader through my thesis and comparison of AMD stock and its peers.
AMD Has Huge Opportunities
On Dec. 22, Swiss bank UBS issued a bullish note on the chip market in general and AMD stock in particular. According to the bank, chip makers are heading into a “sweet spot… (as) inventory has peaked and started converting to revenue,” Moreover, the firm thinks that AMD is well-positioned to benefit from data centers’ expansion while the entire sector will get a lift from the incorporation of AI chips into smartphones and PCs.
UBS named AMD and Micron (NASDAQ:MU) as its two top picks in the chip space.
Meanwhile, on Dec. 6, AMD launched its “next-gen AMD Instinct MI300 data center GPU accelerator family,” another InvestorPlace columnist, Chris MacDonald, noted.
CEO Lisa Su has asserted that these chips are “comparable to Nvidia’s H100 chips in training (large language models)” but are superior to NVDA’s H100 chips on inference by 40% “when working with Meta’s Llama 2, a 70 billion parameter LLM,” The Verge reported.
Assuming that Su’s assertions are at least close to accurate, the Instinct MI300 chips can accelerate AMD’s top and bottom line growth by large amounts, given the huge demand for high-quality AI chips and Nvidia’s inability to meet that demand.
The Risks of Buying AMD Stock
Trading at a forward price/earnings ratio of 40 and an Enterprise Value/EBITDA ratio of 58, AMD stock is pricey. Tech enthusiast Jackson Luca asserts that “most bullish forecasts for AMD assume continued share grabs against Intel across PCs and the cloud data center. ”
Given Luca’s statement and the high valuation for AMD stock, I believe the shares will probably bake in continued major share gains by AMD at Intel’s expense.
But with Intel appearing to have greatly improved the quality of its offerings, those gains may not come to pass. Specifically, the firm has started incorporating ‘neural processing units’ into its computer processing unit chips, enabling its CPUs to handle “AI workloads without needing an external GPU,” Luca noted.
And, although the benchmark score of Intel’s upcoming Gaudi 3 AI chips is meaningfully lower than that of AMD’s MI300, Gaudi 3 does beat AMD’s offering regarding transistor count. Also importantly, the Gaudi 3 offers double the memory capacity of the MI300, even though the chips are the same size.
Moreover, as I reported in a previous column, Intel cannot make the Gaudi 2 (Gaudi 3’s predecessor) quickly enough to meet demand. Of course, that indicates that firms are enthusiastic about Gaudi 2 and will like Gaudi 3 even more.
Also noteworthy is that Luca’s “base case” scenario involves AMD losing “marginal..(market) share” to Intel, causing AMD stock to stay “rangebound” for some time going forward. I believe that’s a very realistic prediction.
Intel Is a Better Choice
I view Intel as a better choice than AMD for investors. With a forward price-earnings ratio of 28, Intel has a huge opportunity in AI and, over the longer term, looks poised to generate a great deal of revenue by manufacturing chips for other companies.
On the date of publication, Larry Ramer held a long position in INTC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Larry Ramer has conducted research and written articles on U.S. stocks for 15 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been PLUG, XOM and solar stocks. You can reach him on Stocktwits at @larryramer.
More From InvestorPlace
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The #1 AI Investment Might Be This Company You’ve Never Heard Of
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post Do AMD’s Huge Opportunities Outweigh Its Significant Threats? appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2024-01-01
|
AMD
|
Chipmakers were among Wall Street's favorites in 2023 as their hardware is crucial to countless industries. And as interest in artificial intelligence (AI) soared, so did demand for graphics processing units (GPUs) -- the powerful chips necessary for training and running AI models. That propelled skyrocketing valuations for chip stocks like Advanced Micro Devices (NASDAQ: AMD), which climbed by 128% over the last 12 months.
AMD has ramped up its expansion into AI as it prepares to challenge Nvidia's overwhelming dominance in that market in 2024. Meanwhile, its diverse business gives it solid positions in several other high-growth niches. As a result, there are plenty of reasons to be bullish about AMD's future.
However, before you jump into its stock, it would be wise to consider both the positives and potential negatives. So here are two reasons to buy AMD and one reason to sell.
One reason to buy: AMD has massive earnings potential in AI
AMD's biggest competitor, Nvidia, has seen its business explode in 2023 as it has cornered the market in AI GPUs. The company has an estimated 90% market share in AI chips, and its earnings have skyrocketed. In its fiscal 2024 third quarter, which ended Oct. 29, Nvidia posted revenue growth of 206% year over year while operating income rose 1,600% thanks to surging chip sales.
Nvidia's success is promising for its rival, considering that AMD will begin shipping its most powerful GPU ever in 2024. The new chip is designed specifically to compete with Nvidia's offerings. Meanwhile, Microsoft -- a crucial client for AMD -- has already signed on to use the GPU to optimize the AI features in its Azure cloud service.
Nvidia's near-total command of the AI chip market will likely be challenging to overcome. However, AMD doesn't need to dethrone the leader to enjoy big gains here. According to a projection from Grand View Research, the AI market will expand at a compound annual rate of 37% through 2030 to a value of more than $1 trillion.
With that type of rapid growth, there will be plenty of room for AMD to claim a lucrative slice of the AI pie.
Another reason to buy: A diverse business model
The tech industry is advancing quickly, with companies increasingly seeking high-powered chips to take their products to the next level. As a result, AMD has formed partnerships with companies across the market, supplying its hardware to cloud platforms, video game consoles, laptops, custom-built PCs, and more.
In fact, AMD is the exclusive chip supplier for Sony's PlayStation 5 and Microsoft's Xbox Series X|S, some of the best-selling game consoles of the last few years. The success of these consoles has boosted AMD's gaming revenue by 30% over the last three years as its operating income has climbed 72%.
A position in AMD's stock allows investors to profit from the growth of multiple industries. Its shares have risen nearly 730% since 2019, significantly outperforming the Nasdaq Composite and S&P 500. And the company is only just getting started, with AI likely to propel the stock further along its current trajectory.
One reason to look elsewhere
AMD has a solid long-term outlook. Its chips power an array of devices and systems, and it could see consistent and significant financial growth for decades. However, its stock price soared in 2023 even as it made heavy investments in AI that have yet to start positively impacting its earnings. As a result, its shares are quite expensive by some valuation metrics right now.
Data by YCharts.
These charts compare the price-to-earnings ratios (P/E) and price-to-free cash flows of some of the biggest names in AI and tech. AMD has by far the highest figures for both valuation metrics, meaning its stock offers the least value.
The company looks likely to make serious headway in the AI segment with its soon-to-be-launched AI GPU. However, it's hard to justify its high price point. It might be worth investing in an alternative AI stock for now, and keeping AMD on your radar to reconsider when its valuation comes down to a more attractive level.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-31
|
AMD
|
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum and price momentum.
ADVANCED MICRO DEVICES, INC. (AMD) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
FUNDAMENTAL MOMENTUM: PASS
TWELVE MINUS ONE MOMENTUM: PASS
FINAL RANK: PASS
Detailed Analysis of ADVANCED MICRO DEVICES, INC.
AMD Guru Analysis
AMD Fundamental Analysis
More Information on Dashan Huang
Dashan Huang Portfolio
About Dashan Huang: Dashan Huang is an Assistant Professor of Finance at the Lee Kong Chian School of Business at Singapore Management University. His paper "Twin Momentum" looked at combining traditional price momentum with improving fundamentals to generate market outperformance. In the paper, he identified seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that he combined into a single fundamental momentum measure. He showed that stocks in the top 20% of the universe according to that measure outperformed the market going forward. When he combined that measure with price momentum, he was able to double its outperformance.
Additional Research Links
Top NASDAQ 100 Stocks
Top Technology Stocks
Top Large-Cap Growth Stocks
High Momentum Stocks
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-31
|
AMD
|
Semiconductor stocks outperformed the broader market by a wide margin in 2023, which is evident from the 66% gain clocked by the PHLX Semiconductor Sector index as compared to the 24% gain of the S&P 500 index as of Dec. 27.
Booming demand for artificial intelligence (AI) chips played a key role in driving the impressive surge in semiconductor stocks this year. Not surprisingly, prominent semiconductor companies such as Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) have delivered healthy gains to shareholders in 2023.
AMD data by YCharts.
The good part is that these semiconductor giants' stocks could continue soaring in 2024 thanks to the emergence of a new catalyst.
The PC market is set to rebound in 2024
Sales of personal computers (PCs) have been declining every quarter since the beginning of 2022. That market experienced a sharp surge in demand in 2020 and 2021 thanks to the coronavirus pandemic, which led many consumers to buy new PCs as they shifted to doing more learning, working, and playing at home. However, that demand disappeared in 2022 and the market is estimated to have declined further in 2023.
The good news: 2024 may be the year when PC sales rise again. Market research firm IDC is predicting a 3.4% increase in PC shipments in the new year, while Canalys is forecasting a jump of 8%.
Both firms assert that the growth will be fueled by the advent of AI-enabled PCs, an aging installed base of existing computers, and the looming necessity for users to upgrade to Windows 11 as Microsoft is set to end support for Windows 10 in October 2025. What's more, IDC is expecting the PC market to clock a compound annual growth rate of 3.1% through 2027.
A turnaround in PC sales would be great news for Nvidia and AMD as both companies supply chips for PCs and rely on this space for significant chunks of their top lines.
Nvidia and AMD would benefit
People install Nvidia's graphics cards in PCs to power graphics-intensive tasks such as game-playing, 3D rendering, and video editing. Nvidia has a market share of more than 80% in discrete graphics cards and it's already witnessing a nice recovery in sales of its PC graphics cards as manufacturers restock their inventories in anticipation of a recovery in demand.
In its fiscal 2024 second quarter, which ended July 30, Nvidia's gaming revenue increased 22% year over year to $2.5 billion. This was followed by a year-over-year increase of 81% in the following quarter. Gaming accounted for nearly 16% of Nvidia's revenue in the most recent quarter and the gaming business's impressive momentum of late is likely to complement the AI-fueled growth of its data center business and lead to impressive growth in 2024.
NVDA Revenue Estimates for Current Fiscal Year data by YCharts.
What's more, Nvidia management said during the November conference call with analysts that "generative AI is quickly emerging as the new killer app for high-performance PCs." The chipmaker is looking to target this market with a new platform that's going to significantly increase the speed of AI inference workloads on PCs, which could lead to a jump in the adoption of its graphics cards.
AMD has also witnessed a sharp turnaround in its PC-focused business, which includes central processing units (CPUs) used in desktops, laptops, and workstations. The chipmaker's revenue from this segment was up 42% year over year to $1.5 billion in the third quarter, and accounted for 26% of its top line.
AMD management said in an October conference call with analysts that sales of its Ryzen AI PC processors "grew significantly in the quarter as inventory levels in the PC market normalized and demand began returning to seasonal patterns." CEO Lisa Su also added that AMD has launched more than 50 new notebook designs powered by the Ryzen AI processors, which are equipped with an on-chip AI accelerator to tackle AI workloads.
Even more exciting, AMD says that it is "working closely with Microsoft on the next generation of Windows that will take advantage of our on-chip AI Engine to enable the biggest advances in the Windows user experience in more than 20 years." AMD seems set to ride the wave of recovery in PC sales, especially considering that it has been grabbing a bigger share of this market.
Analysts are expecting AMD's revenue to increase 17% next year to $24 billion, but the company's growing footprint in the AI data center chip space and a recovery in the PC market could help it deliver a stronger revenue jump. This, in turn, could send shares of AMD higher, which is why investors may want to load up on this semiconductor stock right away.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Harsh Chauhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-31
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
A seismic shift is underway in the semiconductor industry, where innovation meets the promise of astronomical growth. Imagine a landscape of three juggernauts poised at the precipice of an explosive market surge. Their strategies and innovations hint at the creation of trillion-dollar titans.
The first one has an unwavering revenue trajectory and a diverse product portfolio. Meanwhile, the second one dominates generative AI and networking. Finally, the third one has a strategic pivot towards AI infrastructure, beckoning an era of unprecedented possibilities. These giants, wielding technological prowess and market foresight, symbolize the beating heart of Silicon Valley’s future.
Let’s explore the crux of the trio’s technology-based trillion-dollar race.
ASML (ASML)
Source: Ralf Liebhold / Shutterstock
ASML’s (NASDAQ:ASML) performance demonstrates a robust trend in net sales.
Consistent revenue generation reflects the company’s ability to forecast and execute effectively. Also, a steady trajectory in sales signifies market demand for their products and services, indicating sustained growth.
Also, the composition of net system sales, primarily driven by logic at 76% and memory at 24%, highlights ASML’s diverse product portfolio. Such a balanced distribution mitigates the risks associated with dependence on a single product line or market segment. This allows the company to leverage opportunities across different sectors within the semiconductor industry. ASML is capturing market share in various technological applications, ensuring resilience against macro-adversities.
A strong order book is a vital element of ASML’s growth. The Q3 net system bookings totaling EUR2.6 billion contributed to a substantial backlog of over EUR35 billion. This robust order book provides visibility into future revenue streams, indicating sustained demand for ASML’s products and services. ASML observed a surge in demand from China, with substantial orders booked in previous years and a current uptick in shipments to Chinese customers.
Therefore, this anticipation of future market trends and technology adoption reflects the company’s strategic planning and readiness to capitalize on emerging opportunities.
Broadcom (AVGO)
Source: Sasima / Shutterstock.com
Generative AI is an emerging moat for Broadcom (NASDAQ:AVGO). The generative AI revenue in Q4 2023 amounted to nearly $1.5 billion, representing 20% of the semiconductor revenue. Ethernet solutions and custom AI accelerators primarily drive this segment’s growth.
Fundamentally, the company’s focus on generative AI speaks volumes about its focus on meeting the demands of advanced technologies. Investing in custom AI accelerators aligns with the growing necessity for tailored AI solutions across industries, especially in hyperscalers and large enterprises.
Moreover, growth is embedded in other segments of the company. For instance, networking revenue in Q4 2023 soared by 23% year over year (YOY), amounting to $3.1 billion and constituting 42% of Broadcom’s semiconductor revenue. This growth was fueled by heightened demand from hyperscalers for AI accelerators, networking switches, routers, and NICs. The consistent growth of networking revenue reached $10.8 billion in fiscal 2023 and is projected to grow further in 2024.
Broadcom’s guidance for fiscal 2024, projecting consolidated revenue of $50 billion, a 40% YOY increase. This suggests the company’s optimistic outlook and confidence in sustaining substantial growth. The quarterly common stock cash dividend increased by 14% to $5.25 per share. And, the company aims for an annual dividend of $21 per share in fiscal 2024, signifying its focus on returning value to shareholders.
AMD (AMD)
Source: JHVEPhoto / Shutterstock.com
As a tech supplier, AMD (NASDAQ:AMD) is crucial within the AI market. The data center AI accelerator market has a massive anticipated growth rate, from $30 billion in 2023 to over $150 billion in 2027. Projected initially at a 50% annual growth rate, the industry adoption has accelerated. Then, this led to the expectation of over 70% annual growth in the next four years, reaching over $400 billion in 2027.
To capitalize on this trend, AMD’s strategy has three core priorities – product portfolio enhancement, developer-friendly software platforms, and extensive partnership collaborations. AMD stands ready and adaptable to address AI infrastructure demands. It emphasizes the need for high-performing, energy-efficient GPUs, CPUs, and adaptive computing solutions. For instance, the launch of MI300X signifies AMD’s focus on technical innovation, specifically in generative AI.
Additionally, the performance metrics comparing the MI300X with competitor models demonstrate the MI300X’s superiority. AMD has 2.4x more memory capacity, 1.6x more memory bandwidth than competitors, and up to 1.6x faster inference performance on widely used models like Llama2-70b.
Lastly, the expansion of AMD’s ecosystem is also supported by the Instinct GPUs and software advancements like ROCm 6. There are significant performance improvements in ROCm 6 for inference tasks and competitive performance metrics with smaller models compared to competitors.
As of this writing, Yiannis Zourmpanos held a long position in ASML. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
More From InvestorPlace
The #1 AI Investment Might Be This Company You’ve Never Heard Of
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post Trillion-Dollar Titans: Top 3 Stocks to Grab Before They Explode in Value appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-30
|
AMD
|
Fool.com contributor Parkev Tatevosian has spent hours meticulously selecting a list of stocks he believes will make excellent additions to long-term investor portfolios in 2024.
*Stock prices used were the afternoon prices of Dec. 28, 2023. The video was published on Dec. 30, 2023.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Parkev Tatevosian, CFA has positions in Alphabet, PayPal, Visa, and Walt Disney. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Chewy, Fiverr International, Fortinet, Home Depot, Meta Platforms, Netflix, Nike, Nvidia, PayPal, Salesforce, Six Flags Entertainment, Starbucks, Target, Uber Technologies, Visa, Walt Disney, and Zoom Video Communications. The Motley Fool recommends Alibaba Group and eBay and recommends the following options: long January 2024 $47.50 calls on Coca-Cola, long January 2025 $47.50 calls on Nike, short December 2023 $67.50 puts on PayPal, and short January 2024 $45 calls on eBay. The Motley Fool has a disclosure policy.
Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-30
|
AMD
|
Many tech stocks stumbled in 2022 as rising interest rates and other macro headwinds rattled the markets. However, many of those stocks also bounced back in 2023 in anticipation of lower rates and a stabilizing macro environment.
That bullishness should persist in 2024 as the PC market recovers, the smartphone market stabilizes, and the artificial intelligence (AI) market expands. I personally believe Intel (NASDAQ: INTC), HP (NYSE: HPQ), and Micron (NASDAQ: MU) will all be lifted higher by those tailwinds and outperform the S&P 500 over the next 12 months.
Image source: Getty Images.
Intel
Intel is the largest producer of x86 central processing units (CPUs) for PCs and data centers. It experienced a growth spurt during the pandemic as consumers bought new PCs for remote work, online classes, and gaming. Data centers also upgraded their servers with new chips to handle the increased usage of their cloud-based services.
However, Intel suffered a severe slowdown over the past two years as the pandemic ended, and macro headwinds drove companies to rein in their spending. Intel also fell behind Taiwan Semiconductor Manufacturing (TSMC) (NYSE: TSM) in the process race to manufacture smaller and denser chips. So, its smaller rival, AMD (NASDAQ: AMD) -- which outsourced its production to TSMC -- pulled ahead of Intel with more power-efficient chips. That's why Intel's revenue has declined year over year for seven consecutive quarters.
That situation might seem bleak, but Intel's revenue actually grew sequentially over the past two quarters as the PC market gradually stabilized. Intel also believes its own foundries can catch up to TSMC in the process race in the near future, which would widen its competitive moat against AMD.
Analysts expect Intel's revenue and adjusted earnings to grow 13% and 99%, respectively, in 2024 as those tailwinds kick in. Intel's stock might not seem like a bargain at 30 times next year's earnings, but its rising profits should quickly compress its forward valuations as the PC market heats up again.
HP
HP, one of the world's largest producers of PCs and printers, experienced a similar boom and bust cycle as Intel. Its revenue has declined year over year for six consecutive quarters as its sales of consumer PCs and printers slipped after the pandemic and macroeconomic headwinds curbed its sales of commercial hardware.
However, HP's sales of personal systems (PCs and workstations) still rose sequentially over the past two quarters. Its sales of printers also grew sequentially last quarter.
That stabilization suggests the company has finally reached its cyclical trough -- and analysts expect its revenue and adjusted earnings per share (EPS) to rise 2% and 5%, respectively, in fiscal 2024 (which ends in October 2024). Those growth rates might seem low, but its stock is dirt cheap at eight times forward earnings and pays an attractive forward yield of 3.7%.
Looking ahead, the company plans to lay off 7%-10% of its workforce by the end of fiscal 2025, streamline its PC portfolio, and launch new products for the higher-growth hybrid work, gaming, industrial graphics, and 3D printing markets. It also intends to roll out new subscription services to expand its gross margins. Those ambitious plans could breathe fresh life into HP's aging business and make it an attractive stock for long-term investors again.
Micron
Micron is one of the world's largest producers of DRAM and NAND memory chips. The end of the 5G upgrade cycle in smartphones, the slowing PC market, and macro challenges for other markets all took a toll on its growth over the past year.
But in the first quarter of fiscal 2024 (which ended on Nov. 30), Micron's revenue rose 16% year over year and finally ended its five-quarter streak of declining revenue. It expects an acceleration to 44% revenue growth in the second quarter, which clearly indicates its cyclical slowdown is over.
Micron attributes that recovery to the expansion of the generative AI market, the robust growth of the automotive chip market, and the stabilization of the smartphone market. Analysts expect its revenue to rise 32% for the full year as it significantly narrows its net losses. For fiscal 2025, they expect its revenue to rise 41% as it returns to profitability.
Micron trades at just 14 times next year's earnings, which suggests the market hasn't fully priced in its cyclical recovery yet. It could head much higher in 2024 as more investors realize that brighter days are ahead for this memory chipmaker.
Should you invest $1,000 in Intel right now?
Before you buy stock in Intel, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Intel wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, HP, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-30
|
AMD
|
Nvidia (NASDAQ: NVDA) was the perfect stock to ride the demand for artificial intelligence (AI) computing in 2023. The graphics processing unit (GPU) leader saw its growth explode throughout the year. Revenue was up 206% year over year in the fiscal third quarter. That enormous growth spurt sent the stock up 238% in 2023.
It's not common for large companies like Nvidia with billions in annual revenue to suddenly experience this level of growth. Obviously, the demand for AI chips is massive, but investors are probably wondering how much more upside the stock could have in 2024. After all, Nvidia's guidance is pointing to slowing growth.
Here's what you should know about Nvidia's growth outlook before deciding to buy the stock.
Key risk factors to watch in 2024
Most of the stock's gain was in the first half of the year. Since the end of June, Nvidia shares have risen just 16%. There are a few factors weighing on the stock as we look ahead to 2024.
Chip export restrictions to China by the U.S. government have created some uncertainty for Nvidia's near-term momentum. The U.S. expanded these restrictions to Vietnam and other countries recently, where revenue has comprised up to a quarter of Nvidia's data center business. However, management expects strong growth in other regions to more than offset this headwind in the short term.
Another risk factor is the limited supply of AI chips and efforts by other tech companies to design their own processors. Google parent Alphabet, Microsoft, and Intel, among others, have their own chips that deliver a better price-performance ratio than Nvidia's costly H100 and H200 GPUs. However, none of these alternatives have been a match for the horsepower provided by Nvidia's data center chips, which have become the standard for all the major cloud service providers.
The greatest near-term challenge might come from Advanced Micro Devices, which just launched new data center GPUs designed for AI workloads. But AMD expects these GPUs to generate only $2 billion in revenue in 2024, which isn't much next to Nvidia.
Nvidia's data center revenue was over $14 billion in the fiscal third quarter alone, representing an annualized rate of $56 billion.
Nvidia expects total revenue to be approximately $20 billion in fiscal Q4, compared to just $6 billion in the year-ago quarter. The massive jump in revenue has been a godsend for the company's profits. As we'll see, this factor alone could justify further gains for the stock in 2024.
Growth is slowing, but the stock's valuation is attractive for long-term investors
Nvidia's guidance shows a lower rate of increase over the previous quarter. The market is anticipating slowing growth next year. However, the stock still looks undervalued considering Nvidia's growth in profits.
Advanced AI chips produce higher margins than other chip sales. The favorable mix shift to higher-margin chips is juicing Nvidia's bottom line, where earnings per share jumped 1,274% year over year last quarter.
The stock trades at just 25 times forward earnings estimates. Nvidia's forward P/E is a bargain for a company serving a fast-growing AI market.
AI is one of the biggest growth opportunities in decades. It's becoming fundamental to products and services that consumers use every day. Nvidia is a blue chip AI stock everyone should consider tucking away in their nest egg.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Ballard has positions in Advanced Micro Devices and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-29
|
AMD
|
No one can predict what the stock market, or any individual stock, will do in 2024. The stock market surged in 2023, which was probably not on many investors' bingo cards in January. But one thing investors can do is avoid investments where the odds are stacked against them. Paying too high a price for even the best company can lead to subpar results.
Two stocks that look far too expensive going into 2024 are Nvidia (NASDAQ: NVDA) and Apple (NASDAQ: AAPL).
Nvidia
Nvidia is the leader of artificial intelligence. The company's data center GPUs are selling faster than they can be made. Training advanced large language models, like those that power ChatGPT, requires incredible computational horsepower. Nvidia's proprietary CUDA compute platform has been around since 2007, pairing with its world-class hardware to create a competitive advantage that has been difficult for anyone to overcome so far.
While Nvidia may appear untouchable, its days of absolute dominance won't last. If estimates for how big the AI accelerator market will become are close to accurate, there will be mammoth incentives for the tech industry to ensure that there are options beyond Nvidia. AMD expects the market for AI chips to grow nearly tenfold by 2027 to $400 billion. Nvidia's market share is almost certain to shrink as alternatives balloon, and as buyers of AI accelerators optimize for total cost of ownership.
Nvidia's growth has been incredible in 2023, and its profits have soared even faster than revenue. The company's profit margins are the highest they've ever been. But the shortage of AI chips won't last forever as competitors race to bring alternatives to market, and neither will the gold rush mentality surrounding AI. Nvidia's software advantage will be chipped away, although that process may take a while.
Nvidia is valued at around $1.22 trillion. That's about 40 times the average analyst estimate for earnings. That valuation doesn't seem unreasonable at first glance, but you must be willing to assume that Nvidia's incredible profit margins and growth rate will persist.
What if they don't? What if the companies spending big to train large language models find that turning those models into sustainable businesses is tougher than expected? What if competing chips from AMD, Intel, and others provide viable alternatives to Nvidia's pricey products? Taking current growth rates and extrapolating out years is a dangerous thing to do, especially in a very new market. ChatGPT, which kicked off the AI frenzy, has only existed for about a year.
If there's any sign that Nvidia is running into trouble in 2024, the stock has a long way to fall.
Apple
What's Apple's growth story? After a big surge during the pandemic's height, revenue has essentially stagnated in the post-pandemic period. Revenue slipped 1% year over year in the fiscal fourth quarter, which ended on Sept. 30, and an import ban on the Apple Watch isn't going to help matters.
The iPhone still represents more than half of Apple's revenue, and it's hard to imagine the smartphone market being a major source of growth for the company in the long run. Refresh cycles have been stretching out, and each year's models offer minimal improvements. The iPhone is an incredible business for Apple, but it's no longer a growth engine for the company.
The services business generated $85 billion of revenue during fiscal 2023, but growth was sluggish. Services revenue rose by about 9%, not enough to offset slumping sales of iPhones, Macs, iPads, and wearables. While earnings per share edged up for the year thanks to share buybacks, net income declined slightly.
The big problem for Apple stock is its valuation. The company's market capitalization now tops $3 trillion, putting the price-to-earnings ratio above 30. Given Apple's anemic growth and the lack of a clear catalyst that could accelerate growth, that valuation seems high. The company's Vision Pro headset is its next big swing, but a $3,499 price tag will be tough for customers to swallow.
Apple stock has soared nearly 50% in 2023, but don't expect a repeat in 2024.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of the S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Timothy Green has positions in Intel. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-29
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
This year was certainly one for the books for Nvidia (NASDAQ:NVDA) stock. The graphics processing unit maker seized upon artificial intelligence like no one’s business and didn’t let go. NVDA stock soared 237% in 2023 and was the best-performing stock amongst the so-called Magnificent 7 stocks.
Yet 2024 might be more of a challenge. Investors will want to use caution before buying shares. There’s no question Nvidia stock is a good, long-term pick, but at these levels the chipmaker is priced for perfection.
AI and NVDA Stock
AI set Nvidia’s business soaring. Revenue is up 85% year to date and growth is accelerating. Sales tripled in the third quarter and profits increased even more. Net income is up six-fold over the first nine months of the year but rose 13 times from the year ago period.
Nvidia’s performance is mind boggling at times. CEO Jensen Huang told investors that all aspects of its business “are all growth engines in full throttle.”
It all comes down to the power of AI. Or rather, the power needed by AI to process the trillions of complex bits of data it crunches. Nvidia’s chip were made for the task.
Gaming computers where Nvidia cut its teeth required the robust computational power of the semiconductor stock’s chips. Bitcoin mining found Nvidia chips had the muscle to handle the gargantuan tasks its mandated.
It was a natural leap with the advent of generative AI that Nvidia had the chops (and the chips) to perform the calculations.
The H100 chip is Nvidia’s most popular AI processor and is now available on every major cloud services platform. In response to the outsized demand, Nvidia boosted production of the processor. Now it’s developed the H200 chip.
The new design doubles the inference speed for running large-language models on them and increases it 18 times for ChatGPT-3-type models.
Too Good to Last?
The massive profits are attracting competitors. Advanced Micro Devices (NASDAQ:AMD) introduced its MI300X chip and Intel (NASDAQ:INTC) is bringing out its Gaudi3 version. Both are reportedly faster and more robust than Nvidia’s H100 and presumably will be offered at much lower cost. That could siphon customers away from Nvidia.
There are a few other headwinds as we move into 2024. Because it only designs the chips but doesn’t manufacture them, it outsources their production to Taiwan Semiconductor Manufacturing (NYSE:TSM).
But it’s not alone in demanding TSM produce AI chips. AMD, Marvell Technology (NASDAQ:MRVL), and a host of other chipmakers need chips produced as well.
TSM is running into capacity constraints. It’s only been able to meet about 80% of demand. Although it will be increasing capacity by 20% next year that’s only a stopgap measure. Another chip shortage is real possibility as demand increases to meet the new load.
How to price quality
For a stock like Nvidia that trades at 65 times earnings, 27 times sales, and 70x free cash flow, that’s a rich valuation. It assumes Nvidia can keep growing as it has. Any hiccups in the AI race could send the chipmaker’s stock tumbling.
CEO Huang also warned the impact of the export controls on chips and technology to China is murky at best. Nvidia has little visibility into how long or how deep the ban will affect its operations. China represents 20% of its data center revenue which is one of its fastest growing businesses.
Investors and analysts heap accolades onto Nvidia, considering it a top-tier stock. But not at any price. Investors will find that 2024 will bring much better opportunities to buy NVDA stock than what the market is offering today.
On the date of publication, Rich Duprey did not hold (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.
More From InvestorPlace
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The #1 AI Investment Might Be This Company You’ve Never Heard Of
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post Can Nvidia Repeat Its Incredible 2023 Performance in 2024? appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-29
|
AMD
|
Advanced Micro Devices (NASDAQ:AMD) is a solid AI (Artificial Intelligence) play, thanks to its growing generative AI offerings. This is reflected in a significant year-to-date gain in AMD’s stock price, which has appreciated by about 130%. Although AMD is expected to benefit from opportunities in AI, it seems that the positives are already reflected in its current market price. Further, its expensive valuation could limit the upside potential.
It’s worth highlighting that AMD stock trades at a forward price-to-earnings multiple of 54.97, much higher than the sector median of 25.16. Further, its price /sales ratio of 10.41 is also higher than the sector median of 3.08 and its five-year average of 6.99.
With this background, let’s look at the Street’s forecast for AMD stock.
Is AMD a Buy, Sell, or Hold?
Wall Street is bullish about AMD stock, driven by substantial growth opportunities presented by AI. For instance, the company’s CEO, Lisa Su, expects the data center accelerator TAM (total addressable market) to grow at a CAGR of over 70% over the next four years and reach $400 billion in 2027. This opens up abundant avenues of growth for the company.
Goldman Sachs analyst Toshiya Hari raised AMD’s price target to $157 from $137 on December 17. The analyst reiterated his Buy rating on AMD stock, citing higher adoption of its “MI300 Data Center GPU offering across the cloud and enterprise markets.”
AMD stock has 26 Buy and eight Hold recommendations for a Strong Buy consensus rating. However, analysts’ average price target of $132.41 implies a downside potential of 10.99% from current levels.
Bottom Line
The solid adoption of AMD’s new AI GPU, its focus on broadening its product portfolio, and a large addressable market presents significant growth opportunities. However, its expensive valuation remains a concern, as reflected by analysts’ average price target, suggesting a potential downside from current levels.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-29
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
After the massive gains artificial intelligence companies saw in 2023, there are additional gains to realize by investing in AI in 2024. You can use the Portfolio Grader to find the best AI stock picks for the new year.
The AI space will be worth roughly $207.9 billion in 2023. That’s a huge number. But when you look ahead you see it’s only a drop in the bucket. But by 2025, AI should be a $420.4 opportunity, doubling in just two years. By 2030, we’re looking at a projected $1.84 trillion market size for AI.
Clearly, there are massive opportunities in investing in these AI stock picks. Artificial intelligence is a disruptive technology that is changing how the world operates as we speak.
There are great AI stock picks across the board in customer service and healthcare, or transportation, manufacturing and finance. Companies are scrambling to incorporate AI into their platforms to operate more efficiently, automate processes and serve customers better.
AI also leads to even more transformative technologies such as robotics, the Internet of Things, machine learning and blockchain.
There are hundreds of companies that either have or are developing AI processes. But the Portfolio Grader is your best option to pick those that have the best chance to profit in 2024. These are seven stocks that are highly ranked as we head into 2024.
Nvidia (NVDA)
Source: Poetra.RH / Shutterstock.com
Any list of AI stocks to buy for 2024 has to start with Nvidia (NASDAQ:NVDA). The Wall Street darling soared in 2023, rising 237% to reach a market capitalization of $1.2 trillion. That makes Nvidia the sixth-largest company in the world by market capitalization.
Nvidia is one of the top AI stock picks because AI wouldn’t be possible today without its graphics processing chips. I mean, you could have AI, but it wouldn’t be taking the form and function that you see today.
Nvidia’s A100 chip has provided the computational power that drives many AI programs. According to Citigroup, Nvidia has roughly a 90% market share in the AI GPU market, and that’s expected to remain stable for the next couple of years.
Consider Nvidia’s massive revenue growth, up 206% in the last year, to $18.12 billion in the most recent quarter. I’m not worried at all about Nvidia topping out any time soon. It gets an “A” rating in the Portfolio Grader
Advanced Micro Devices (AMD)
Source: Sundry Photography / Shutterstock.com
Advanced Micro Devices (NASDAQ:AMD) is on a good run, with the stock price up 125% this year, including a 43% charge higher since late October.
Its new Instinct MI300X accelerators look to rival Nvidia, able to handle the power required of today’s AI workloads. The MI300X series is expected to be useful for large-scale cloud computing projects.
AMD CEO Lisa Su says that the company has an adequate supply of chips on hand, with a market value of more than $2 billion. So there shouldn’t be any supply chain issues for AMD to get these chips to customers.
And there is reasonable concern that AMD stock may be fully valued at this point, I think there’s some reason for bullishness. AMD recently increased its total addressable market estimate for its AI processors from $30 billion to $45 billion. That’s a huge jump.
Earnings for the third quarter were $5.8 billion in revenue, up from $5.5 billion a year ago. Income was $299 million and 18 cents per share, versus $66 million and 4 cents per share in the same quarter last year.
AMD stock gets an “A” rating in the Portfolio Grader.
Microsoft (MSFT)
Source: The Art of Pics / Shutterstock.com
Microsoft (NASDAQ:MSFT) is another huge company that’s gotten even bigger through AI. Just more than a year ago, Microsoft’s investment and partnership in OpenAI opened the world’s eyes to the potential of generative AI through ChatGPT.
The company’s partnership with OpenAI is even drawing the attention of regulators in the U.S. and the U.K., who are looking at Microsoft’s role in the firing and rehiring this fall of OpenAI founder Sam Altman.
But I’m not concerned. Nor am I overly concerned about the New York Times’ lawsuit against OpenAI and Microsoft over copyright infringement, even though Microsoft is entitled to 49% of OpenAI’s profits through its investment.
Microsoft stock is up 55% in 2023. Its revenue for the first quarter of fiscal 2024 (ending September 30, 2023) was $56.5 billion, up 13% from a year ago.
“We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers,” CEO Satya Nadella said.
MSFT stock gets an “A” rating in the Portfolio Grader.
Coinbase Global (COIN)
Source: Sergei Elagin / Shutterstock.com
Coinbase Global (NASDAQ:COIN) is a top digital wallet. It allows users to buy, sell or hold 230 different cryptocurrencies and manages billions in trades of digital assets every quarter.
Coinbase uses AI and machine learning to validate users and recognize anomalies that show fraud. For instance, it uses a face-similarity algorithm that extracts faces from previously loaded IDs and compares them to new applicants.
Since scammers often use the same photo for multiple IDs, Coinbase is able to detect a forged ID more effectively.
Coinbase also has products like Coinbase Advanced, allowing users to use AI and automated strategies to trade and evaluate digital assets.
If you’re looking to invest in blockchain and cryptocurrencies without actually buying a token, there are few better choices than a company like Coinbase. COIN stock is up an astounding 420% this year, including a gain of 159% in the last three months. It gets an “A” rating in the Portfolio Grader.
Riot Platforms (RIOT)
Source: rafapress / Shutterstock.com
Riot Platforms (NASDAQ:RIOT) is another way to dive into the crypto market through the back door. The Texas-based company is a top Bitcoin (BTC-USD) mining company.
It has over 95,900 miners and a hash rate of 10.7 exahashes per second (an exahash is 1 quintillion hashes, or 1,000,000,000,000,000,000 hash computations).
As a result, Riot owns and operates the largest Bitcoin mining facility in the U.S. In November alone it produced 552 Bitcoin, up from 458 in the previous month and up from 521 in November 2022.
The company now holds over 7,350 Bitcoin, and that’s after selling 540 of the tokens in November at a price of $19.6 million, up 142% from a year ago.
Riot is profiting handsomely from Bitcoin’s advance in price. It sold the tokens at an average price of $36,278 in November, up from $18,000 a year ago.
The company’s RiotX algorithm uses AI and machine learning to optimize mining and increase profits by automatically adjusting mining parameters according to network conditions and resources.
RIOT stock is up 411% this year. It gets an “A” rating in the Portfolio Grader.
Meta Platforms (META)
Source: MR Neon / Shutterstock
Meta Platforms (NASDAQ:META) is one of the biggest turnaround stories of 2023. After falling 64% in 2022, Meta jumped by nearly 200% this year and is closing in on an all-time high set in September 2021.
AI has a lot to do with it. Artificial intelligence is helping Meta monetize its mammoth Facebook and Instagram platforms. It’s rolling out products like Imagine, a standalone AI image generator. Its Meta AI product is an advanced conversational assistant that’s usable in the WhatsApp, Messenger and Instagram platforms.
It’s also launching 28 additional AI programs with their own interests and personalities, with some of them played by influencers such as Snoop Dogg, Kendall Jenner and Naomi Osaka.
While it could take some time for AI to be a serious contributor to Meta’s bottom line, this type of work could trigger some serious long-term growth for the company’s bottom line.
META stock gets an “A” rating in the Portfolio Grader.
Uber (UBER)
Source: Shutterstock
I love Uber (NYSE:UBER) as one of my top AI stock picks right now. The company completely transformed the tax industry by becoming the biggest and best rideshare company. Then it expanded into food delivery with its Uber Eats app.
Uber is also the newest member of the S&P 500 as it joined on December 18.
Uber uses artificial intelligence to detect crashes and guide its drivers to improve GPS. It also uses AI to help approve new driver’s licenses, improve customer recommendations on its Uber Eats app, and optimize advertisements.
Revenue in the third quarter was up 11% to $9.3 billion, and gross bookings were up 21%.
UBER stock is up 155% in 2023 and gets an “A” rating in the Portfolio Grader.
On the date of publication, Louis Navellier had a long position in NVDA and MSFT. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article had a long position in NVDA. The staff member did not hold (either directly or indirectly) any other positions in the securities mentioned in this article.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post 7 Cutting-Edge Tech Stocks That Will Define 2024 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-29
|
AMD
|
Shares of JD.com, Inc. JD rose 2.7%, with mega-cap Chinese stocks staging their biggest jump in five months.
Chevron Corporation’s CVX shares declined 1.4% on energy becoming the biggest losing segment of the day.
Shares of Consolidated Edison, Inc. ED gained 1% on the utility sector becoming the winner of the session.
Advanced Micro Devices, Inc.’s AMD shares advanced 1.8% on reports that the company would release a new graphics card in January 2024.
Zacks Reveals ChatGPT "Sleeper" Stock
One little-known company is at the heart of an especially brilliant Artificial Intelligence sector. By 2030, the AI industry is predicted to have an internet and iPhone-scale economic impact of $15.7 Trillion.
As a service to readers, Zacks is providing a bonus report that names and explains this explosive growth stock and 4 other "must buys." Plus more.
Download Free ChatGPT Stock Report Right Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Chevron Corporation (CVX) : Free Stock Analysis Report
Consolidated Edison Inc (ED) : Free Stock Analysis Report
JD.com, Inc. (JD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-29
|
AMD
|
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum and price momentum.
ADVANCED MICRO DEVICES, INC. (AMD) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
FUNDAMENTAL MOMENTUM: PASS
TWELVE MINUS ONE MOMENTUM: PASS
FINAL RANK: PASS
Detailed Analysis of ADVANCED MICRO DEVICES, INC.
AMD Guru Analysis
AMD Fundamental Analysis
More Information on Dashan Huang
Dashan Huang Portfolio
About Dashan Huang: Dashan Huang is an Assistant Professor of Finance at the Lee Kong Chian School of Business at Singapore Management University. His paper "Twin Momentum" looked at combining traditional price momentum with improving fundamentals to generate market outperformance. In the paper, he identified seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that he combined into a single fundamental momentum measure. He showed that stocks in the top 20% of the universe according to that measure outperformed the market going forward. When he combined that measure with price momentum, he was able to double its outperformance.
Additional Research Links
Top NASDAQ 100 Stocks
Top Technology Stocks
Top Large-Cap Growth Stocks
High Momentum Stocks
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-29
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
As you look at semiconductor stock picks for 2024, it’s important to understand the state of the sector. Semiconductors are in the early stages of a super cycle that may have several years to run. That’s good news for investors who are not currently invested in this sector.
The seeds for this rally were planted in 2020 when companies and consumers realized how dependent they were on these tiny chips from everything from smartphones to automobiles. As chip stocks tend to do, they surged as companies boosted demand, then fell off as companies had all the chips they needed.
But there are two wildcards that are reshaping the cyclical nature of semiconductor stocks. One is the emergence of artificial intelligence (AI) and specifically generative AI. The other catalyst is the CHIPS and Science Act of 2022. The purpose of this legislation is to reward companies that will bring research and development of technologies like semiconductors to the United States.
And with the first tranche of funding just released in December 2023, chip stocks are moving higher. Here are seven semiconductor stock picks that are expected to stand out in 2024.
Nvidia (NVDA)
Source: Poetra.RH / Shutterstock.com
Nvidia (NASDAQ:NVDA) was one of the top semiconductor stock picks for 2023, and there’s no reason to believe it won’t be another strong stock in 2024. According to some estimates, Nvidia had about 80% of the data center market prior to the AI boom. And it was quickly apparent that the company’s graphic processing units (GPUs) had the speed to handle the demands of AI applications.
Nvidia’s launch of the H200 chip is proof that the company isn’t resting on its laurels. It’s also another reason to believe that the company will remain at the top of the chip sector for some time. However, skeptics point out that the company simply can’t meet the insatiable demand for AI chips, at least not quickly. That will open the door for other competitors.
It also calls into question the company’s valuation. The company currently trades at 65x earnings and 44x forward earnings. Putting that aside, analysts are projecting 65% earnings growth with a price target of $668.11. That’s a 34% increase from the current price. And, out of 52 analysts that have issued a rating on NVDA stock in the last three months, 42 give the stock a Strong Buy rating.
Advanced Micro Devices (AMD)
Source: Pamela Marciano / Shutterstock.com
Advanced Micro Devices (NASDAQ:AMD) is well-positioned to take market share from Nvidia. The company’s new MI300 chips have the processing power and memory that will allow it to compete with Nvidia in the data center and AI markets. AMD Chief Executive Officer (CEO) Lisa Su believes the MI300 could contribute $2 billion to the top line in 2024. Many analysts believe that may be too conservative.
One reason for that optimism is the company’s partnerships with some of the biggest names in big tech such as Meta Platforms (NASDAQ:META), Amazon (NASDAQ:AMZN), OpenAI, Microsoft (NASDAQ:MSFT), and Oracle (NYSE:ORCL). These companies are all saying they will support both AMD and Nvidia GPUs.
AMD stock is up 130% in 2023 and much of that has come in the last three months with the stock surging over 45%. In December, Bank of America (NYSE:BAC) upgraded AMD to a Buy rating with a price target of $165.
Intel (INTC)
Source: JHVEPhoto / Shutterstock.com
Intel (NASDAQ:INTC) is another one of the top semiconductor stock picks for 2024. Even before the CHIPS Act was proposed, Intel was planning to build two chip fabrication plants in the United States.
But INTC stock lagged the chip sector in 2023, largely because it didn’t have an AI offering. That’s about to change. Intel will launch the Gaudi 3, its 3rd generation AI accelerator in 2024. The expectation is that it will outperform Nvidia’s H100 chip in data center and deep learning applications.
The company is also planning to launch its Falcon Shores GPU in 2025 which will merge the company’s GPU and Gaudi capabilities in a single product.
Of all the stocks on this list, INTC stock presents the cloudiest picture. As of this writing, analysts believe the stock’s price will come down significantly in 2024. But in December, the company has been receiving bullish upgrades from at least four analysts. If the company can match analysts’ expectations with solid earnings results, the stock may present an attractive combination of growth and value.
Taiwan Semiconductor Manufacturing (TSM)
Source: sdx15 / Shutterstock.com
Taiwan Semiconductor Manufacturing (NYSE:TSM) presents investors with a different way to invest in semiconductor stocks in 2024. The company manufactures chips for many tech giants. It also partners with chip designers like Nvidia. In fact, the company has 58% market share in the third-party semiconductor manufacturing space.
One headwind for TSM stock is geopolitical concerns stemming from a speculated invasion of Taiwan by China. Under that scenario, the chairman of Taiwan’s National Security Bureau remarks that TSMC would be unable to do business due to U.S. sanctions that “prevent Chinese chipmakers from accessing tools they need to produce leading-edge devices.”
That threat, along with the CHIPS Act, are key reasons why TSMC is investing heavily to build a fab plant in Arizona. That’s eaten away at earnings in 2023, but analysts expect over 20% earnings growth over the next five years.
And unlike many of the stocks on this list, you can buy TSM stock at just 21x forward earnings.
Micron Technology (MU)
Source: Charles Knowles / Shutterstock.com
I recently put Micron Technology (NASDAQ:MU) on a list of three tech stocks projected to take off in 2024. All the arguments I made in that article are also reasons that Micron will be a key semiconductor stock to own in 2024.
Micron is the leader in dynamic random-access memory (DRAM) chips. Memory chips will be critical as AI applications require tremendous amounts of memory. The “smart” products that are available today will be dwarfed by what is coming from AI in coming years.
In late 2023, Micron launched its HBM3E memory-chip module. The chip design offers 10% more output and 30% less power consumption than competing hardware, making it an ideal choice for the requirements of AI and supercomputing. The company expects to be producing the chips at scale early in 2024 which will deliver several hundred million dollars to the topline in 2024.
Analysts are looking past the company’s revenue which on an overall basis was flat in 2023. Instead, they’re focusing on the company’s recent quarter in which it posted strong growth in the data center market. Combined with the expected comeback in the company’s core business sectors and you’ll see why 25 out of 39 analysts give MU stock a Strong buy rating.
Analysts continue to bid MU stock higher. More than a dozen analysts have boosted their price target for the stock since the earnings report. And out of 39 analysts, 25 give the stock a Strong Buy rating.
Applied Materials (AMAT)
Source: michelmond / Shutterstock.com
Applied Materials (NASDAQ:AMAT) makes this list of semiconductor stock picks because of the essential role they play in chip manufacturing. Applied Materials is a pick-and-shovel stock because it makes the equipment that chip manufacturers need. Semiconductors lead economic growth, and companies like Applied Materials leads that charge.
That’s why it could be slightly concerning that the company’s revenue growth for fiscal year 2023 was around 3%. However, earnings per share (EPS) growth was a more impressive 8%.
With AMAT stock trading near the top of its 52-week range as of this writing, investors can expect a pullback. However, with analysts giving the stock a Moderate Buy rating, that will be a good opportunity for investors who are on the sideline to enter a position in one of the essential companies in the semiconductor sector.
Skyworks Solutions (SWKS)
Source: madamF / Shutterstock.com
Yet another way to invest in the semiconductor sector is with Skyworks Solutions (NASDAQ:SWKS). The company isn’t a player in the AI chip market. Rather, it’s focused primarily on creating chips that are needed for wireless devices.
But one of the company’s largest customers is Apple (NASDAQ;AAPL). Say what you will about Apple, but the iPhone remains one of the most sought-after mobile devices which should put a floor on SWKS stock.
The question may be what is the ceiling? SWKS stock is up 25% in 2023 despite quarterly revenue and earnings that are falling on a year-over-year basis. Nevertheless, analysts still have a Moderate Buy rating on the stock with a $116 price target. That’s only about 1% above the stock’s price as of this writing. That makes it likely that there will be an opportunistic pullback that investors can capitalize on.
On the date of publication, Chris Markoch 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.
More From InvestorPlace
The #1 AI Investment Might Be This Company You’ve Never Heard Of
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post Top 7 Semiconductor Stock Picks for the New Year appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-29
|
AMD
|
Given this is my last commentary about unusual options activity in 2023, I thought I'd go out with a bang.
What a year it's been in the markets. The Dow (up 13.8%), S&P 500 (25.08%), Nasdaq 100 (55.57%), and Russell 2000 (17.57%) are all in positive territory entering the last trading day of the year.
Of the 503 stocks in the S&P 500, roughly one-third will finish the year in negative territory. Yet, for most investors, 2023 will be a successful year, especially given it rebounded from a not-so-good year in 2022.
The Magnificent 7 delivered an average return of 113% in 2023, double the Nasdaq 100 and 4.5 times the S&P 500. Remove those from the equation; the year wasn’t quite as successful for the S&P 500.
Heading into 2024, I thought I’d cover three stocks with unusual options activity that investors can hold into 2025. All three are stocks worth owning for the long haul.
Happy New Year to all. We’ll see you on the other side!
Hershey (Put)
Hershey (HSY) had two unusually active put options on Thursday that expire in 2025.
They were the Jan. 17/2025 $260 and Jan. 17/2025 $280. The former’s volume-to-open-interest (Vol/OI) ratio was 5.85, while the latter’s was 5.00. Both have 385 days to expiration.
I’ll first explain why I like Hershey, the company, and its stock, and then I’ll return to the two options in question.
HSY stock was one of the 166 stocks in the S&P 500 that will finish in negative territory in 2023, down 18.2% year-to-date as I write this in early Friday trading.
In May, Hershey's stock traded at a 52-week and all-time high of $276.88. Down 33% in the eight months since it was most certainly due for a correction, at its 2023 high, it was trading at nearly 28x its 2024 earnings per share estimate of $9.97.
That’s considerably higher than its five-year average price-to-forward earnings multiple of 24.5. However, its current price of $185 is trading at just 18.6x its 2024 forward EPS estimate.
And that doesn’t consider any M&A activity it does in 2024 to strengthen its snacks business, which now accounts for over 10% of its overall revenue.
Lastly, Michele Buck is one of the finest CEOs in America. Since becoming CEO in March 2017, her focused strategy has paid big dividends for long-time shareholders.
Now, back to the options.
The $260 strike had a bid price of $73.50 yesterday, while the $280’s bid was $93.50. So, while the latter bid is $20 higher, the net price for both would be $186.50. Usually, I’d go with the lower strike, but in this instance, I think HSY makes an excellent long-term buy, so being $20 further in the money shouldn’t be a concern if you believe the shares will rise in 2024.
I do.
Advanced Micro Devices (Call)
Advanced Micro Devices (AMD) had quite a year in the markets, gaining 135% YTD. Of course, it doesn’t compare to Nvidia’s (NVDA) 248% return. Nonetheless, it's been a nice ride if you’ve owned AMD in 2023. I believe it can continue.
Over the past few years, I noticed that when Nvidia stock performs well as it has over the past 12-18 months, AMD tends to lag behind, and vice versa.
Regarding artificial intelligence (AI), Nvidia tends to get most of the positive press clippings. However, AMD CEO Lisa Su isn’t sitting idly by. In September, Su discussed the company’s newest chip, the MI300.
“It’s targeted at large language model training as well as large language model inference. Do we see opportunity? Yes. We see significant opportunity, and it’s not just in one place. The idea of the cloud guys are the only users, that’s not true. There’s going to be a lot of enterprise AI,” Su told The Verge editor-in-chief Nilay Patel in September.
The one thing I’ve always found about Lisa Su is that she underpromises and over-delivers.
The Jan. 17/2025 $250 call had a Vol/OI ratio of 1.32 yesterday. The ask price of $5.90 was a 2.4% down payment on these calls. With a delta of $0.19537, you can double your money on the call with a $30.20 move in its share price over the next 385 days.
The worst-case scenario is that the share price doesn’t increase, and you’re out $590. The best case is that it doubles in 2024, and you make $50 a share rather than $6.
Zillow Group (Call)
I have a funny feeling that residential real estate will heat up in 2024 as interest rates move lower due to subdued inflation.
Fannie Mae projects that home prices will rise by 2.8% in 2024; the Mortgage Bankers Association sees a 4.1% increase, while the National Association of Realtors predicts a mere 0.7% growth in the year ahead.
Again, it depends on the Federal Reserve’s interest rates and inflation stance. They’re on record saying they should come down in 2024. How far they fall will determine how hot or cold the housing market is.
In the end, a housing shortage in the U.S. won't be solved in the near term by lower interest rates and higher new home construction. It will take years for the supply to meet the existing demand.
Ultimately, however, the housing market should stabilize in 2024, and that’s good news for Zillow’s business.
Despite a 73% gain for Zillow stock in 2023, I could see another big move in 2024. It wouldn’t surprise me if it hit $100 by the end of 2024.
It just so happens that Zillow’s unusually active call option yesterday was the Jan. 17/2025 $85 strike with a $4.05 ask. That’s a down payment of 4.8%. While a tad high given the 385 days to expiration, your downside is protected by the 0.30549 delta, which suggests you can double your money on the call with a $13.26 (22.5%) move higher over the next 385 days from its $58.85 current share price.
I see the risk/reward proposition in your favor with this long-duration call.
More Options News from Barchart
Coke vs. PepsiCo: Wednesday's Unusual Options Activity Says Investors Are Thirsty for Answers
How to Buy CELH For a 12% Discount, or Achieve a 39% Annual Return
Coinbase Stock Shows Large Unusual Stock Options Activity Today
2 Bullish Option Trade Ideas To Consider This Wednesday
On the date of publication, Will Ashworth did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
When many investors think of tech stocks, they think of the NASDAQ (NDX), and with good reason: the exchange is home to many of the world’s top tech companies. While the New York Stock Exchange (NYSE) doesn’t necessarily get as much attention from tech investors, it's not to be overlooked, as the ETF that invests in the NYSE Technology Index, the SPDR NYSE Technology ETF (NYSEARCA:XNTK), quietly outperformed the NASDAQ this year by a significant margin.
There’s no question that the NASDAQ had a great year, gaining an incredible 54.5% year-to-date as we head into the close of 2023. But XNTK did even better, posting a jaw-dropping 71.3% gain year-to-date.
I’m bullish on XNTK going forward based on the compelling group of high-powered tech stocks that it owns and its strong performance track record. I also view it as a good way for people investing in NASDAQ ETFs to gain additional exposure to some tech stocks they may miss out on by only investing in the NASDAQ. Let’s take a closer look at this under-the-radar but high-flying tech ETF.
What is the XNTK ETF’s Strategy?
Fund sponsor State Street explains that XNTK “seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the NYSE Technology Index," an “index composed of 35 leading US-listed technology-related companies.”
This index includes companies in the Information Technology sector and technology-related stocks from the Consumer Discretionary sector.
Unlike many other ETFs, XNTK is equal-weighted at its annual rebalance. This is why it isn’t dominated by a handful of mega-cap tech stocks like many other popular tech ETFs, as discussed below.
What Stocks Does XNTK Own?
XNTK only owns 37 stocks, but its top 10 holdings only account for 30.1% of its assets.
Below is an overview of XNTK’s top 10 holdings from TipRanks’ holdings tool.
As you can see, semiconductor stocks account for many of XNTK’s top 10 holdings. The top seven holdings are all related to the semiconductor industry, and this has helped to drive XNTK’s strong performance in 2023 as semiconductor stocks have soared based on advances in artificial intelligence.
Top holding Broadcom (NASDAQ:AVGO) has gained over 105.5% year-to-date, while other prominent holdings like Advanced Micro Devices (NASDAQ:AMD), Intel (NASDAQ:INTC), and Lam Research (NASDAQ:LRCX) gained 127.6%, 95.2%, and 91.5%, respectively.
While semiconductor stocks are heavily represented and have driven much of XNTK’s strong 2023 performance, many other types of technology stocks are represented: Intuit (NASDAQ:INTU), Netflix (NASDAQ:NFLX), and Booking Holdings (NASDAQ:BKNG) round out the top 10.
Outside of its top holdings, XNTK owns some of China’s largest tech stocks, such as Alibaba (NYSE:BABA) and PDD Holdings (NASDAQ:PDD). While Alibaba struggled this year, PDD surged to a year-to-date gain of 78.9%. Uber (NYSE:UBER) was another one of XNTK's big winners, with a 150.6% gain.
TipRanks’ Smart Score system rates XNTK’s portfolio highly. The Smart Score is a proprietary quantitative stock scoring system created by TipRanks. It gives stocks a score from 1 to 10 based on eight market key factors. A score of 8 or above is equivalent to an Outperform rating.
Seven of XNTK’s top 10 holdings feature Outperform-equivalent Smart Scores of 8 or higher, including Broadcom, Advanced Micro Devices, and Intel, which all boast perfect 10 Smart Scores.
XNTK itself features an ETF Smart Score of 8.
Because XNTK rebalances to an equal weighting annually, it isn’t dominated by a small handful of mega-cap tech stocks, making it a less concentrated option than popular tech ETFs like the Invesco QQQ Trust (NASDAQ:QQQ) or the Technology Select Sector SPDR Fund (NYSEARCA:XLK).
For example, QQQ’s top 10 holdings account for 45.7% of the fund, with its top two positions, Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), making up 17.8% of assets.
Meanwhile, XLK’s top 10 holdings make up 69.2% of the fund, with Apple and Microsoft combining to make up 44.5% of assets.
XNTK owns these stocks, too, but as discussed above, its top 10 holdings make up just 30.5% of the fund, and Microsoft and Apple combine to make up just 5.4% of holdings.
Long-Term Performance
Over the past three years, XNTK has delivered an underwhelming annualized return of 5.8% (as of November 30).
But over the long term, it has generated excellent returns. As of November 30, XNTK has produced a five-year annualized return of 19.3% and a 10-year return of 17.4%.
These five- and 10-year returns compare favorably to the broader market. For example, as of November 30, the Vanguard S&P 500 ETF (NYSEARCA:VOO) has produced annualized returns of 12.5% and 11.8% over the five- and 10-year time frames, respectively.
XNTK’s performance puts it in the same conversation as QQQ and XLK, the popular tech ETFs mentioned above.
As of November 30, QQQ has generated annualized returns of 18.9% over the past five years and 17.4% over the past 10. Meanwhile, over the same time frame, XLK has produced annualized five- and 10-year returns of 23.5% and 19.9%, respectively.
While XNTK has slightly lagged XLK, its performance aligns with QQQ, which is widely perceived as one of the market’s top ETFs. Ultimately, all three tech-focused powerhouses have delivered phenomenal returns over the past decade.
What is XNTK’s Expense Ratio?
XNTK charges an expense ratio of 0.35%, which is reasonable. This means an investor in the fund will pay $35 annually on a $10,000 investment. While this is cheaper than the expense ratios of many other ETFs, it should be noted that both QQQ and XLK are cheaper, with expense ratios of 0.20% and 0.10%, respectively.
Is XNTK Stock a Buy, According to Analysts?
Turning to Wall Street, XNTK earns a Moderate Buy consensus rating based on 31 buys, six Holds, and zero Sell ratings assigned in the past three months. The average XNTK stock price target of $172.38 implies 5.4% upside potential.
Takeaway: XNTK is an Underrated ETF
XNTK is an underrated ETF that put up a performance for the ages in 2023, besting the more popular QQQ in the process. Going forward, I’m bullish on XNTK based on its strong long-term performance and its strong collection of highly-rated blue chip tech stocks.
The ETF has certainly already had quite a run. However, over the long term, it still looks promising as it gives investors exposure to themes that have plenty of growth potential, like semiconductors, artificial intelligence, and the cloud.
While XNTK is a worthwhile investment in its own right, it also looks like a good way for investors to gain some tech exposure that’s a bit different than what the likes of XLK and QQQ offer, making it a good complement to these funds as well.
Disclosure
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
For Immediate Release
Chicago, IL – December 28, 2023 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Novo Nordisk A/S NVO, Walmart Inc. WMT, Advanced Micro Devices, Inc. AMD, Caterpillar Inc. CAT and Union Pacific Corp. UNP.
Here are highlights from Wednesday’s Analyst Blog:
Top Analyst Reports for Novo Nordisk, Walmart and AMD
The Zacks Research Daily presents the best research output of our analyst team. Today's Research Daily features new research reports on 16 major stocks, including Novo Nordisk A/S, Walmart Inc. and Advanced Micro Devices, Inc. These research reports have been hand-picked from the roughly 70 reports published by our analyst team today.
You can see all of today's research reports here >>>
Shares of Novo Nordisk have outperformed the Zacks Large-Cap Pharmaceuticals industry over the past year (+55.5% vs. +9.1%). The company beat earnings and revenue estimates in third-quarter 2023 due to higher GLP-1 product sales. It has one of the broadest diabetes portfolios in the industry. Ozempic and Rybelsus have been performing well in the diabetes market.
Obesity drug Wegovy has been enjoying increasing demand. Label expansions of diabetes and obesity care drugs in cardiovascular and other indications will likely boost sales. Novo Nordisk raised its 2023 view due to higher demand for Ozempic and Wegovy.
Its diversifying efforts to develop new treatments are encouraging. To tackle the supply constraints of Wegovy in international markets, Novo recently announced initiating a €2.1 billion project to expand its current manufacturing facility in Chartres, France.
(You can read the full research report on Novo Nordisk here >>>)
Walmart's shares have outperformed the Zacks Retail - Supermarkets industry over the past year (+10.4% vs. +9.3%). The company's performance was driven by its robust omnichannel operations aimed at improving the overall shopping experience. Walmart's strategic focus on enhancing delivery services has been especially rewarding.
This is evident from the constant increase in the market share for groceries, which boosted U.S. comparable sales in the second quarter of fiscal 2024. During the quarter, the top and bottom lines grew year over year, encouraging management to raise its guidance for fiscal 2024.
Strong comp sales growth globally and e-commerce growth across all units were upsides. While the gross margin increased year over year, it was partly hurt by an adverse category mix, which is likely to linger in the third quarter. Management also expects variable pay expenses to increase year over year in the third quarter.
(You can read the full research report on Walmart here >>>)
Shares of AMD have outperformed the Zacks Electronics - Semiconductors industry over the past year (+129.2% vs. +102.9%). The company is benefiting from portfolio strength and an expanding partner base. Strong demand for EPYC processors has been a growth driver.
The launch of the Ryzen 8040 series processor with Ryzen AI and Instinct MI300 Series data center AI accelerators bodes well for top-line growth. AMD continues to benefit from acquisitions, including Xilinx and Pensando, which has diversified its business.
For fourth-quarter 2023, AMD expects to witness year-over-year growth in the Data Center and Client segments by double-digit percentage. Sequentially, the Data Center segment's revenues are expected to grow on a double-digit percentage, while Client is expected to increase. However, weakness in the Gaming and Embedded segment revenues are expected to hurt top-line growth.
(You can read the full research report on AMD here >>>)
Other noteworthy reports we are featuring today include Caterpillar Inc. and Union Pacific Corp..
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +6.2 average gain per year. Amazingly, they soared with average gains of +46.4%, +49.5% and +55.2% per year. Today you can access their live picks without cost or obligation.
See Stocks Free >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Caterpillar Inc. (CAT) : Free Stock Analysis Report
Novo Nordisk A/S (NVO) : Free Stock Analysis Report
Walmart Inc. (WMT) : Free Stock Analysis Report
Union Pacific Corporation (UNP) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
As of 2023, the United States economy has successfully navigated challenges, managing to cool down inflation and avoid a recession. Policymakers have worked to achieve a “soft landing,” aiming to further slow inflation without triggering a downturn that could lead to mass layoffs. Despite a generally positive outlook among economists. Inflation has shown signs of improvement, and the U.S. economy continues to grow, but caution remains as policymakers strive to maintain stability. With this currently rebounding economy, now is the time to invest in stocks that are on a strong growth tangent. Invest in these three key companies that young investors have in their crosshairs.
Stocks Resonating with Young Investors Block Incorporated (SQ)
Source: Sergei Elagin / Shutterstock
Block Incorporated (NYSE:SQ) is a multinational American technology conglomerate, Block has a solid portfolio and extensive growth possibilities.
Exhibiting great financials, Block has beat earnings projections for the last three quarters and currently has a low ESG Risk Score of 19.8. Additionally, 39 Yahoo Finance! investors give it a price range of $40 to $100, with an average of $76.01. The company reports $20.79 billion in revenue in Q3 2023, with a YoY quarterly revenue growth of 24.40%.
While currently making a loss, this is due to R&D expenditures towards fintech hardware with Bitcoin as a payment option. It sells these point-of-sale (POS) units at a loss but is likely to profit with increased cryptocurrency transactions. The company expands its customer base by partnering with Canadian cannabis firm, Jane Technologies. Additionally, Block makes a great margin through CashApp and Square transactions and subscriptions, amounting to 42%.
Block is a buy stock for millennials who want to invest in what they use, along with its great financials, developing an innovative fintech payment service, and more mentioned above. Make like the young investors and start investing.
Advanced Micro (AMD)
Source: Pamela Marciano / Shutterstock.com
Advanced Micro (NASDAQ:AMD), specializes in semiconductor manufacturing. The company designs computer processing components, including microprocessors, graphics processors, and programmable gate arrays, catering to diverse industries.
Year-to-date, AMD stocks have surged by an impressive 130%. Currently priced at $146, analysts have provided price targets ranging from $54 to $182, with an average target of $121. Analysts recommend AMD as both a “Buy” and a “Strong Buy” option.
AMD has unveiled its latest offerings, the AMD Instinct MI300X accelerators and the AMD Instinct MI300A accelerated processing unit (APU), signaling a significant catalyst for the semiconductor giant. These cutting-edge solutions boast industry-leading memory bandwidth for generative AI, delivering breakthrough performance for large language model (LLM) training and inferencing. The AMD Instinct MI300 Series accelerators, featuring advanced technologies, are poised for widespread adoption in large-scale cloud and enterprise deployments. With key partnerships established with industry leaders such as Microsoft, Dell, HPE, Lenovo and Supermicro, AMD’s innovative hardware and open ecosystem approach position it at the forefront of the burgeoning AI solutions market. As a result, AMD’s strategic advancements underscore its commitment to empowering enterprises with state-of-the-art AI technologies, setting the stage for continued growth and leadership in the semiconductor industry.
In summary, AMD’s capacity to innovate and thrive across diverse industries positions it as a compelling investment opportunity for those seeking stocks with substantial growth potential for millennials. There’s a reason why young investors want to add this one to their portfolios.
Okta (OKTA)
Source: Poetra.RH / Shutterstock.com
Okta Inc (NASDAQ:OKTA) is an American business focused on web services and network security. With the prevalence of the internet in the modern day, cybersecurity has jumped into a forefront concern, leading to the recent success of Okta. Valued at $90.60, OKTA saw a strong year-over-year growth of 39.47%.
The global information technology industry has been subject to recent surges in success, growing from $8.2 trillion in 2022 up to 8.9 trillion in 2023. This figure is expected to compound to nearly $12 trillion by 2027, marking a five-year CAGR of 7.9% With Okta being one of the largest players, expect for its market cap to increase by the year.
Largely, Okta has seen recent surges in business attributed to its heavy research and development into artificial intelligence and machine learning for its products. Recently, the company introduced the adoption of Okta AI, a cybersecurity protection using the power of AI for companies’ web pages. Results have been shown through the introduction, as seen by the 90% reduction of bot traffic and fake users. Overall, OKTA’s business strategy of adapting to the changing industry has proven to improve its business and give great forecasts for 2024.
On the date of publication, Michael Que 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.
The researchers contributing to this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
Michael Que is a financial writer with extensive experience in the technology industry, with his work featured on Seeking Alpha, Benzinga and MSN Money. He is the owner of Que Capital, a research firm that combines fundamental analysis with ESG factors to pick the best sustainable long-term investments.
More From InvestorPlace
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The #1 AI Investment Might Be This Company You’ve Never Heard Of
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post Millennial Money Movers: 3 Stocks Resonating with Young Investors appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
In late November 2022, I highlighted three large-cap growth stocks heading into 2023. Those included Advanced Micro Devices (NASDAQ:AMD), which ran from $73 to $146 a share; Apple (NASDAQ:AAPL), which ran from $146 to $193.70; and Nvidia (NASDAQ:NVDA), which ran from $152 to $497. Today, I was asked for my top large-cap growth stocks for 2024.
To start, I still like AMD, AAPL, and NVDA with the artificial intelligence boom. In fact, in 2024, I’d like to see AMD closer to $200, AAPL near $550; and NVDA closer to $600 a share. Aside from those three, I like the following three large-cap growth stocks for 2024.
Nike Inc. (NKE)
Source: mimohe / Shutterstock.com
Crisis is creating opportunity for large-cap growth stocks, like Nike (NYSE:NKE).
After rocketing from about $92 to about $122.50, Nike gapped to about $107.13 after saying it expected softer sales for the second half of its fiscal year. However, it appears most of the negativity has been priced into the stock. Plus, according to Goldman Sachs, which rates Nike a buy, margins did come in better than expected.
Despite the weak forecast, the company beat profit and revenue expectations. Profits jumped 21% year over year (YOY) to $1.03, with revenues up 1% YOY to $13.4 billion. Analysts expected 84 cents on $13.4 billion in revenues. So, numbers weren’t too shabby. Plus, NKE is looking to cut about $2 billion over the next three years.
And while NKE may not be firing on all cylinders again just yet thanks to macro headwinds, analysts are more bullish these days. For example, Citi upgraded NKE to a buy recently, noting that NKE is an “attractive margin recovery story,” as noted by Barron’s.
Coca-Cola (KO)
Source: Jonathan Weiss / Shutterstock
Coca-Cola (NYSE:KO) delivers growth, reliability, and dividends. With a yield of 3.13%, the company just announced a quarterly dividend of 46 cents per common share, payable Dec. 15 to share owners of record as of the close of business Dec. 1. It’s been paying out dividends for 61 years.
Earnings have been strong, too. Its third-quarter EPS of 74 cents beat estimates by five cents. Revenues of $12 billion were up 8% YOY and beat estimates by $580 million. Also, the company raised its outlook again, with profits likely to rise 7% to 8%. Additionally, Citi analysts just raised their price target on KO to $67, with a buy rating.
“Citi sees a return to historical growth levels in 2024, with a few exceptions, the analyst tells investors in a research note. 2024, the firm believes the key theme will be mean reversion, with names able to retain above-average and above-peer trends likely to outperform,” noted by TheFly.com.
Vanguard Growth ETF (VUG)
Source: shutterstock.com/Imagentle
Or, if you want to diversify among large-cap growth stocks, there’s always an exchange-traded fund, such as the Vanguard Growth ETF (NYSEARCA:VUG). With an expense ratio of just 0.04%, the ETF tracks the performance of the CRSP U.S. Large Cap Growth Index.
While the VUG ETF did run from about $210 to $312 since the start of the year, it could see higher highs. This is thanks to some of its top holdings in Apple, Microsoft (NASDAQ:MSFT), Amazon.com (NASDAQ:AMZN), Nvidia Corp., Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Eli Lilly (NYSE:LLY), and Visa (NYSE:V).
On the date of publication, Ian Cooper did not hold (either directly or indirectly) any positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
More From InvestorPlace
The #1 AI Investment Might Be This Company You’ve Never Heard Of
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post Top 3 Large-Cap Growth Stock Picks for the New Year appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
With just a couple of days left in the trading year, all the major markets are posting significant gains. At this time in 2022, not many investors would have taken that side of the bet. So, what lessons should investors take away after a volatile and unpredictable year in stocks?
For starters, 2023 was a good reminder to invest in the market that is, not what you think it should be. To put that in terms that any parent with a teenager will understand: Trust but verify. At more than one point this past year, you would have believed a stock market crash not seen since 1929 was around the corner. Yet, every time, equities got off the mat, dusted themselves off and moved higher.
And as the year comes to an end, there are billions, if not trillions of dollars re-entering the market. But are those dollars chasing overpriced stocks, or are they going after small-cap stocks with a lot of potential but no proven track record? And where should investors be thinking about putting their money in 2024?
Here are some thoughts on the lessons a year in stocks can teach us.
There’s a Reason Why Nvidia Is Just Getting Started
Many investors aren’t sure what to make of the artificial intelligence (AI) boom. On the one hand, to paraphrase writer Alan Saunders, AI is an example of life happening while we are busy making other plans. That is, we’ve known about AI for some time, yet the ChatGPT phenomenon made it impossible to ignore.
The question is: Will it be friend or foe? Like all technological advances, it will likely be a little of both. As much as well-intentioned regulators will try, there will be bad actors with equally bad intentions. That’s troublesome. But on balance, AI will be transformative in how we interact with technology. And by we, I mean many who find today’s technology limiting.
That means, like the internet, it’s a net win.
That’s why companies are rushing to get in on AI. It’s not going to be a nice-to-have, it will be a must-have. And it’s also why companies like Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and other chip companies will flourish. This is the beginning of a super cycle, and there’s still a lot of runway ahead.
The Death of the Consumer Was (Mildly) Exaggerated
Part of analyzing a year in stocks is identifying the best and worst sectors. At the beginning of the year, conventional wisdom was that consumer staples would do well and consumer discretionary stocks would struggle.
In fact, the opposite occurred. Consumer staples have been the second-worst-performing sector. The companies performed well enough, but investors starving for growth shifted to high-flying tech stocks. Meanwhile, consumer discretionary stocks are up nearly 20% as demand for travel and recreation remains strong.
Is this demand being fueled by reckless spending that will come crashing down when the credit card bills come due? That’s been predicted for some time, and it hasn’t happened yet.
The takeaway for investors is two-fold. One, don’t bet against the consumer. And two, be selective. Just because the consumer staples sector underperformed doesn’t mean there were no winners. Conversely, many consumer discretionary stocks really did face some tough times.
Demand Delayed Is Not Demand Denied
The energy sector did not perform as expected. For starters, the renewable energy movement is still struggling to get off the starting blocks. The solar sector is a good example of why even government subsidies can’t change the basics of supply and demand. The same could be said of electric vehicles.
Yet, oil and gas stocks have been laggards as well. In September and October, crude oil prices near $100 were considered a certainty. But as the year comes to an end, crude oil is closer to $70.
In both cases, investors should look at this as a case of demand delayed, not denied. In December, the Federal Reserve all but ensured interest rates would be cut in 2024, more than once — most likely. When that happens, oil demand will rise and, with it, the price of crude oil. An improving economy will also be a boost for renewable energy companies, which will benefit from lower capital costs.
On the date of publication, Chris Markoch did not hold (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.
More From InvestorPlace
The #1 AI Investment Might Be This Company You’ve Never Heard Of
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post A Year in Stocks: What Worked and What Didn’t in 2023 appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
In today's video, I discuss recent updates impacting Nvidia (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD). Check out the short video to learn more, consider subscribing, and click the special offer link below.
*Stock prices used were the market prices of Dec. 27, 2023. The video was published on Dec. 27, 2023.
Should you invest $1,000 in Nvidia right now?
Before you buy stock in Nvidia, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Nvidia wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
Jose Najarro has positions in Advanced Micro Devices and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy. Jose Najarro is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through their link they will earn some extra money that supports their channel. Their opinions remain their own and are unaffected by The Motley Fool.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The AI stocks landscape has undergone a seismic shift, emerging as one of the most critical sectors for growth in 2023. After a challenging 2022, a broad spectrum of tech stocks experienced a rejuvenating uplift amidst the integration of artificial intelligence (AI). As we transition into a new year, expectations are high for lower rates and more advanced generative AI technologies. This evolving landscape presents a golden opportunity for investors to effectively diversify their portfolios with AI stocks, especially as valuations continue to rise.
The AI market, currently valued at over $200 billion, is projected to skyrocket to $1.85 trillion by 2030. While the spotlight remains on well-known AI stocks, savvy investors know the importance of staying ahead of the curve. Paying the right price for the right company is key. AI has become a buzzword in numerous conference calls, signaling its massive influence. As companies ramp up their AI investments, a broader range of AI picks will emerge, some of which may not be immediately recognizable as AI players.
Nvidia (NVDA)
Source: Evolf / Shutterstock.com
Nvidia (NASDAQ:NVDA) remains a titan in the tech realm which continues its impressive stride, fueled by groundbreaking AI advancements. This dynamism isn’t just about staying ahead; it’s about effectively reshaping the sector. As the demand for its H100 chips skyrockets, clients are showing remarkable patience, waiting weeks to harness these AI powerhouses. Hence, the pivot to AI for Nvidia has been incredible, a move mirrored by its stellar financial performance over the last three quarters, consistently outpacing analyst estimates.
In a striking showcase of market dominance, Nvidia has sold over half a million chips, with forecasts pointing to a sustained surge in sales. In the face of such overwhelming success, Nvidia stands not just as a market leader but as a visionary force, continually pushing the boundaries of tech innovation. Their journey, marked by strategic pivots and financial triumphs, paints a picture of a company not just riding the wave of AI evolution but steering it with unmatched expertise.
Microsoft (MSFT)
Source: The Art of Pics / Shutterstock.com
Microsoft (NASDAQ:MSFT) remains a formidable force in the tech world, with its shares surging more than 50% year-to-date. The firm’s strategic investment in OpenAI places it at the forefront of the AI revolution. Furthermore, Microsoft 2023 effectively claimed an early lead in the generative AI race thanks to its massive investment in OpenAI. This move not only cements its position as a leader in AI but highlights the company’s keen insight into future tech trends.
But Microsoft’s AI ambitions extend beyond cloud solutions. The recent introduction of Copilot, an AI assistant integrated with multiple Microsoft Office products, demonstrates the enterprise’s innovative approach to enhancing user experience. MSFT’s ongoing development of diverse AI solutions is poised to bolster product retention and unlock new business avenues, reaffirming its status as a titan. CEO Satya Nadella’s vision of propelling Microsoft to $500 billion in annual revenues by 2030 is ambitious but achievable, given the company’s aggressive AI investment. Therefore, as it stands, Microsoft’s trajectory in the AI landscape continues to be one of immense growth and influential leadership in the tech sphere.
Advanced Micro Devices (AMD)
Source: JHVEPhoto / Shutterstock.com
Advanced Micro Devices (NASDAQ:AMD), cited as the runner-up to Nvidia in the AI stock arena, trails in chip technology. However, it’s imperative to note the significant strides AMD has made, particularly with regard to MI300 chips. These advancements are fueling an uptick in its share prices, a signal of the market’s recognition of its progress. While some analysts could potentially downplay the impact of these chips in the face of Nvidia’s market dominance, the real-world response from top Silicon Valley companies paints a unique picture.
These tech giants are increasingly opting for AMD’s MI300 chips over Nvidia’s H100 chips, a decision that speaks volumes about their confidence in AMD’s offerings. This shift is primarily attributed to Nvidia’s premium pricing, positioning AMD as an attractive alternative. As AMD continues to innovate and offer cost-effective solutions, it’s carving out a niche for itself in the AI sector. Additionally, this emerging preference among Silicon Valley’s elite for AMD’s technology could mark the beginning of a more balanced playing field in the AI chip market.
UiPath (PATH)
Source: dennizn / Shutterstock.com
UiPath (NYSE:PATH), based in New York City, is making significant waves in the AI sphere with its autonomous solutions. The company, known for its AI-enabled software, caters to a wide array of industries, including healthcare, finance, IT and government, demonstrating its broad applicability. Over the past year, UiPath has seen its share price more than double, reflecting the market’s positive response to the integration of AI solutions in user interface management.
In their latest financial report released on Nov. 30, the company revealed a robust 24% increase in total revenue, with a 45% decrease in net loss, underscoring its operational efficiency and financial health. Furthermore, UiPath has shown impressive growth in its customer base, especially among high-value clients. There was a 31% increase in customers with $1 million or more in annual recurring revenue (ARR), totaling 264 customers. This customer expansion highlights UiPath’s ability to attract and retain important clients, which is critical for sustained growth and revenue generation in the competitive AI sphere.
SoundHound (SOUN)
Source: Tada Images / Shutterstock.com
SoundHound (NASDAQ:SOUN) is a prominent name in conversational AI and is capturing investor attention as the focus shifts from generative to conversational AI. Its most recent innovation, ‘Employee Assist,’ has effectively revolutionized fast-food service by providing real-time AI support to employees and building on customer service. Additionally, the company’s strategic acquisition of SYNQ3 Restaurant Solutions marks a significant expansion in the voice AI sector, particularly in U.S. restaurants, extending its reach to over 10,000 locations.
Financially, SoundHound remains on an upward trajectory. In the third quarter, the firm reported revenue of $13.3 million, a massive 52% increase sequentially and 19% year-over-year. Impressively, SoundHound boasts a 73% gross margin and has made notable improvements across its bottom line with a 57% increase in adjusted EBITDA. These solid financials, combined with innovative products, including Employee Assist, position SoundHound as a notable player in the AI stock market.
Alphabet (GOOG, GOOGL)
Source: Koshiro K / Shutterstock.com
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is a tech giant known for its revenue dominance, cementing its status as a top-tier tech stock with significant advancements in AI. This leap forward is marked by the debut of Gemini, its innovative AI model. Gemini not only establishes Alphabet as a strong contender against OpenAI but also highlights its central role in technological innovation.
In the third quarter, the company’s earnings surpassed forecasts by 10 cents, reaching $1.55 per share. Additionally, revenue soared to $76.79 billion, an 11.1% increase year-over-year, exceeding expectations by a notable $980 million. A key factor in this financial success is Google Cloud, which reported a 22.6% year-over-year bump in sales, reaching $8.41 billion.
The launch of Gemini is set to propel Alphabet’s AI capabilities further, aiming to rival Microsoft’s OpenAI. Gemini boasts speed advantages over OpenAI’s new model and offers three distinct versions. However, Alphabet’s appeal to investors extends beyond Gemini, with the company boasting a solid history, impressive fundamentals, and a dominant market share through Google Search, making it a compelling long-term investment choice.
Adobe (ADBE)
Source: JHVEPhoto / Shutterstock
Adobe (NASDAQ:ADBE), a significant player in the AI and tech landscape, continues to make waves, though it often feels shy of reaching the pinnacle of industry leaders. Yet, its firm footing in AI, with innovations like Sensei and Firefly, remains undeniable. Moreover, its recent release of its 4th quarter earnings is a testament to its powerful performance.
Its EPS stood at a remarkable $4.27, with the company surpassing overall analyst expectations, signaling a robust financial position. The revenue figures are equally impressive, clocking in at $5.05 billion for the quarter, surpassing Wall Street’s forecast by about $30 million. This achievement not only underscores Adobe’s financial health but also suggests that its investments in AI are yielding fruitful results.
Furthermore, Adobe’s stock has seen a remarkable upsurge in 2023, soaring by more than 70% year-to-date. This robust positioning not only demonstrates Adobe’s innovative edge but also indicates its potential for sustained growth and shareholder value enhancement in the evolving digital landscape.
On the date of publication, Muslim Farooque 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.
More From InvestorPlace
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The #1 AI Investment Might Be This Company You’ve Never Heard Of
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post AI Assimilation: 7 Stocks Leading in Artificial Intelligence Adoption appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
Looking today at week-over-week shares outstanding changes among the universe of ETFs covered at ETF Channel, one standout is the iShares Core S&P Total U.S. Stock Market ETF (Symbol: ITOT) where we have detected an approximate $169.0 million dollar inflow -- that's a 0.3% increase week over week in outstanding units (from 466,900,000 to 468,500,000). Among the largest underlying components of ITOT, in trading today Advanced Micro Devices Inc (Symbol: AMD) is up about 2.1%, Accenture plc (Symbol: ACN) is off about 0.3%, and Intel Corp (Symbol: INTC) is lower by about 1.1%. For a complete list of holdings, visit the ITOT Holdings page » The chart below shows the one year price performance of ITOT, versus its 200 day moving average:
Looking at the chart above, ITOT's low point in its 52 week range is $83.77 per share, with $105.83 as the 52 week high point — that compares with a last trade of $105.81. Comparing the most recent share price to the 200 day moving average can also be a useful technical analysis technique -- learn more about the 200 day moving average ».
Free Report: Top 8%+ Dividends (paid monthly)
Exchange traded funds (ETFs) trade just like stocks, but instead of ''shares'' investors are actually buying and selling ''units''. These ''units'' can be traded back and forth just like stocks, but can also be created or destroyed to accommodate investor demand. Each week we monitor the week-over-week change in shares outstanding data, to keep a lookout for those ETFs experiencing notable inflows (many new units created) or outflows (many old units destroyed). Creation of new units will mean the underlying holdings of the ETF need to be purchased, while destruction of units involves selling underlying holdings, so large flows can also impact the individual components held within ETFs.
Click here to find out which 9 other ETFs had notable inflows »
Also see:
Institutional Holders of CBTC
AUUD Videos
LGTO Videos
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
Rambus RMBS introduced the Gen4 DDR5 Registering Clock Driver (RCD) with data rate capabilities of up to 7200 MT/s. The company has leveraged its three decades of experience in delivering the new DDR5 that outranks its predecessors running at 4800 MT/s.
The chipset performs seamlessly on Dual Inline Memory Modules (DIMMs) while enabling substantial memory augmentation. Together with Rambus’ other innovative components integrated into Server DDR5 Registered DIMMs, the Gen4 DDR5 RCD enhances bandwidth, performance and capacity. It can also be integrated into Non-volatile Memory DIMMs with a similar effect.
The recently introduced chipset is rolled out in the market with the aim to support the rising demands of generative artificial intelligence-based operations and other advanced data center tasks that demand high bandwidth.
Rambus, Inc. Price and Consensus
Rambus, Inc. price-consensus-chart | Rambus, Inc. Quote
Rambus specializes in memory interface chips and silicon intellectual properties (IP) and provides the patent license for these products. The Gen4 DDR5 Registering Clock Driver is part of its memory interface chip portfolio that includes Serial Presence Detect Hubs, Temperature Sensors and DDR4 chipsets.
RMBS’ Silicon IP division, on the other hand, comprises high-speed memory and chip-to-chip interconnect technologies, including physical interface and digital controller IP, crypto cores, hardware roots of trust, high-speed protocol engines and chip provisioning technologies.
The company leverages its diverse portfolio of products to enable its customers to manufacture their own electronic and digital products while using specified portions of its patented inventions. Companies like Advanced Micro Devices AMD, Broadcom, Cisco, CXMT, IBM, Marvell, MediaTek, Micron, NVIDIA NVDA, Qualcomm and STMicroelectronics use RMBS’ patents.
Rambus and Advanced Micro Devices signed their first Patent License Agreement in the mid-2000s. The initial agreement allowed AMD to use RMBS’ patents in various technologies, including those used in DDR2, DDR3, FB-DIMM, PCI Express and XDR controllers. NVIDIA has been using Rambus technology for more than a decade now.
With a broad portfolio of offerings and industry leaders subscribing to its patents, RMBS is poised to grow amid the expanding demand, driven by the rising competition in the artificial intelligence market and the increasing need for data center workloads.
Zacks Rank & A Stock to Consider
Currently, Rambus and AMD carry a Zacks Rank #3 (Hold) each, while NVDA carries a Zacks Rank #2 (Buy). Shares of Rambus, AMD and NVIDIA have returned 91.2%, 125.5% and 238.1% year to date, respectively.
A better-ranked stock from the broader technology sector is CommVault Systems CVLT, which sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CommVault Systems’ third-quarter 2024 earnings has remained unchanged over the past 90 days at 73 cents per share. Shares of CVLT have surged 28.2% year to date.
Zacks Naming Top 10 Stocks for 2024
Want to be tipped off early to our 10 top picks for the entirety of 2024?
History suggests their performance could be sensational.
From 2012 (when our Director of Research, Sheraz Mian assumed responsibility for the portfolio) through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2024. Don’t miss your chance to get in on these stocks when they’re released on January 2.
Be First to New Top 10 Stocks >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Rambus, Inc. (RMBS) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
CommVault Systems, Inc. (CVLT) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-28
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
One of the biggest surprises of 2023 was the rise of a handful of tech giants that came to be known as the Magnificent 7. Their performance this year carried the Nasdaq 100 index to an all-time high and was responsible for virtually all the gains of the S&P 500.
Yet what was hot this year may turn cold in 2024. In fact, if history is any guide, it almost surely will be the opposite. Trends investors latched onto last year will fall out of favor as the market migrates to the next new thing.
What follows are my 2024 market predictions for two hottest trends that will crash in the coming year and one that will soar no matter what.
2024 Market Predictions – Trend Crash No. 1: Artificial Intelligence
The biggest news story of 2023 was artificial intelligence (AI). ChatGPT’s release was a monumental breakthrough in bringing generative AI to the forefront of investor consciousness. However, it might not be sustainable. It promises to be a great equalizer, but questions persist about whether it can achieve all that’s promised.
Graphics chipmaker Nvidia (NASDAQ:NVDA) is the AI leader because its GPUs were almost purpose-built for the complex computing tasks AI requires. It was the best-performing stock of the Magnificent 7, as shares more than tripled in value this year. But investors shouldn’t expect next year to be the same.
Competition for AI chips is growing. Advanced Micro Devices (NASDAQ:AMD) just unveiled its MI300X chip that offers better performance than Nvidia’s popular H100 chip. Intel (NASDAQ:INTC) is also in the running with its new Gaudi3 chip. Yet Nvidia responded with its H200, which is more powerful but has a hefty price tag. Export controls on computer chips and technology to China are another wildcard. Not even the chipmakers themselves can see the long-term impact.
A second concern is the capacity constraints on chip manufacturing. Taiwan Semiconductor Manufacturing (NYSE:TSM) is the foundry the semiconductor stocks turn to produce their AI chips, but it’s hitting a wall on chip-on-wafer-on-substrate (CoWoS) capacity. Although its capacity is increasing by 20% next year, that may not be enough. Chip shortages could be a reality.
Third is whether the greater efficiency, lower costs, or whatever yardstick AI promises will ever pan out. AI demand will dry up if the gains fail to materialize to justify the cost. That might not happen next year, but the reckoning is coming. Investors might not see today’s AI winners in the running tomorrow.
Trend Crash No. 2: Electric Vehicles
Electric vehicles (EVs) are the second investing trend that may skid off the road in 2024. Tesla (NASDAQ:TSLA) was a Magnificent seven stock that had a bumpy ride this year but still doubled in value. Next year could be even more jarring.
As with AI, EV competition is becoming more intense just as demand cools. Not only are there more manufacturers globally chasing fewer car buyer dollars, but several manufacturers appear ready to flame out. Lucid (NASDAQ:LCID) and Nikola (NASDAQ:NKLA) may get bought out or fail before gaining traction.
The main problem is price. EVs are just too expensive compared to fossil fuel-powered vehicles. Manufacturers are resorting to price-cutting to make them more affordable, which erodes profit margins. The industry isn’t so mature, and companies aren’t so profitable they can afford that. And the limitations of the current technology don’t make simple price parity a large enough incentive to move buyers to them.
Moreover, the Federal Reserve’s aggressive interest-rate hikes pushed the cost of financing EVs beyond the range of buyers. It’s just too expensive to purchase an EV when an internal combustion engine car costs less, goes further and takes only minutes to refill.
Battery makers are working on extending the travel range and lowering the charge time for EVs, but that’s a future goal. In the meantime, vehicles are piling up on dealer lots. Both Ford (NYSE:F) and GM(NYSE:GM) have also suspended production on certain models due to slack demand.
The market rush into EV stocks this year could readily short-circuit next year even if the long-term trend may be in the industry’s favor.
2024 Market Predictions – Trend Winner: Cybersecurity
Protecting online data wasn’t much of a headline grabber this year, but it’s an inevitable trend that will have staying power for years to come. The Identity Theft Resource Center says there were 2,116 data breaches in the first three quarters of 2023. That makes it the worst year ever for cybercrime. It’s not going to stop, either. It’s why cybersecurity stocks had an impressive year.
CrowdStrike (NASDAQ:CRWD) is one of the leading players as its Falcon platform quickly sifts through trillions of events weekly, looking for threats. Annual recurring revenue (ARR) more than doubled over the past two years. It grew from $1.1 billion in fiscal 2021 to $2.6 billion in fiscal 2023. It also pries more money out of each customer. For every $1.00 a customer initially spent in 2021, CrowdStrike realizes $6.07 in ARR today.
Yet it’s not alone. Palo Alto Networks (NASDAQ:PANW), Sentinel One (NYSE:S), and Snowflake (NASDAQ:SNOW) all had impressive years this year as well. Like death and taxes, cybercrime is going to be with us forever. The industry is expected to grow from $156 billion last year to $425 billion in 2030. That’s a near-14% compounded annual growth rate. It’s not the meteoric rise you see in some industries, but it will be a steady growth business. It will fuel the creation of millionaires who invest in it today.
On the date of publication, Rich Duprey did not hold (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.
More From InvestorPlace
The #1 AI Investment Might Be This Company You’ve Never Heard Of
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post 2024 Market Predictions: 2 Trends Destined to Crash, One Set to Soar appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-27
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
The semiconductor landscape stands on the precipice of transformative innovation, driven by technological prowess and market dynamism. Three key players are carving paths toward groundbreaking advancements in generative AI and emerging technologies. The first one has its strategic market penetrations. Meanwhile, the second has comprehensive AI solutions, and the third has a relentless pursuit of technological milestones. These companies are redefining the semiconductor industry’s trajectory.
These giants showcase a tapestry of innovations, from powering cutting-edge smartphones to enabling electric vehicles (EVs) and revolutionizing data centers. The first focuses on GaN and SiC technologies for multiple sectors, the second one’s diverse AI platforms and the third’s ambitious node development underscores a commitment to shaping the future.
This article delves into these semiconductor stocks regarding strategies, market positioning and technological leaps, illuminating the intricate dance between innovation and market demand and highlighting their pivotal roles in shaping the semiconductor industry’s landscape.
Navitas (NVTS)
Source: Shutterstock
Navitas‘ (NASDAQ:NVTS) effective partnerships and market penetrations reinforce its growth potential. Samsung Sandstone adopted the company’s integrated gallium nitride (GaN) to power the latest Galaxy S-23 and other models. That signifies a vital market win and immediate contribution to revenue ramp-up in Q3 and Q4.
Additionally, Navitas focuses on mobile and consumer segments, evident from over a dozen customer projects in development. The company is targeting the fastest charging segment of 100 watts or more, projected to contribute over $10 million annually in revenue.
In the solar and energy storage markets, macroeconomic factors led to some near-term market softness impacting Navitas’ silicon carbide (SiC) business. The company foresees robust growth in its customer pipeline, aligning with the anticipated market recovery in H2 2024.
Similarly, Navitas observed significant increases in its customer pipeline for onboard and roadside chargers in the electric vehicle market. A 6.6 kilowatt, 800-volt onboard charger platform has been developed, integrating Gen 3 fast silicon carbide devices and GaN safe IC. That indicates Navitas’ focus on innovation and its ability to cater to evolving market demands.
The company responded to the increasing power demands of AI and edge computing in the data center sector with a new alternating current (AC) to direct current (DC) platform design. Thus, it is showcasing superior energy efficiencies and power density. As a result, these efficiencies attract many projects in its customer pipeline.
Finally, Navitas’ customer pipeline is expanding in the appliance and industrial sectors. That drives regulatory requirements for energy efficiency and consumer demands for power density improvements, demonstrating the company’s market traction.
Super Micro (SMCI)
Source: Owlie Productions / Shutterstock.com
Super Micro’s (NASDAQ:SMCI) comprehensive AI solution portfolio encompasses various platforms, including the Nvidia (NASDAQ:NVDA) HGX-H100, Intel (NASDAQ:INTC) Gaudi 2 and AMD (NASDAQ:AMD) MI250, MI300X and MI300A-based platforms. That diverse range of offerings allows the company to enhance its market competitiveness and potentially increase its market share in the accelerated computing space.
Additionally, the company’s focus on continuous innovation is evident from its consistent efforts to launch new AI-optimized platforms. Introducing products like the Nvidia CG1, CG2 Grace Hopper Superchip, and Nvidia Grace CPU Superchip highlights Super Micro’s agility in responding to market demands and staying ahead in the rapidly evolving AI technology.
To be specific, Super Micro focuses on enhancing storage solutions. That includes PCIe Gen 5-based E1.S and E3.S Petascale All-Flash storage servers, suggesting its focus on catering to evolving storage needs. That innovation aligns with the increasing demand for high-performance storage solutions to handle massive datasets. It expands Super Micro’s offerings further and addresses clients’ requirements comprehensively.
Moving to operating leverage and the bottom line, the company can maintain substantial operating leverage during a traditionally soft quarter. That is evident from its non-GAAP earnings hitting $3.43 per share (Q1 fiscal 2024), indicating operational efficiency and cost management. Hence, this stability in earnings suggests Super Micro’s ability to generate consistent profits even amidst challenging market conditions.
Finally, Super Micro has a positive cash flow generation of $271 million and a debt reduction of $144 million, highlighting its robust financial position and effective debt management strategies. Lastly, the company’s expansion plans include surpassing the current capacity of 4000 racks per month and expanding revenue capacity beyond $20 billion. Therefore, this represents its confidence in sustained growth and preparedness for scaling operations.
Intel (INTC)
Intel’s progression in achieving notable process and product milestones reflects its focus on innovation and technological advancement. The company’s emphasis on node development and manufacturing efficiency is reflected in various achievements.
Fundamentally, the strategic goal of achieving five nodes within a four-year timeline underscores Intel’s ambition and dedication to technological progression. The milestone of completing Intel 7 and delivering nearly 150 million units (Alder Lake, Raptor Lake and Sapphire Rapids) to the market, demonstrates the company’s execution capabilities.
Furthermore, initiating shipments for Meteor Lake on Intel 4 during Q3 2023 was a crucial step forward. The company has aggressively ramped up highly productive Extreme Ultraviolet Lithography (EUV) tools. That provides over a 20% capital efficiency advantage compared to earlier tools, highlighting Intel’s focus on enhancing manufacturing efficiency.
Additionally, high-volume EUV manufacturing is expanding in Oregon and Ireland. That shows Intel’s geographic diversification and resilience in establishing itself as a leading semiconductor manufacturer across major regions globally.
Similarly, Intel’s focus on advancing semiconductor technology is evident through its pioneering developments in transistor architecture, specifically RibbonFET and PowerVia. These innovations mark significant milestones in the pursuit of industry-leading process technology. Specifically, the progression into the angstrom era with Intel 20A and Intel 18A indicates a forward leap in Intel’s technological edge. Also, milestones like the 0.9 release of the Process Design Kit (PDK) for Intel 18A indicate readiness for commercial production.
Lastly, completing the invention phase for RibbonFET and PowerVIA marks a critical step forward. Intel’s move towards production-ready, industry-leading process technology underscores the company’s pursuit of innovation and ability to push technological boundaries.
As of this writing, Yiannis Zourmpanos held a long position in INTC. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post 3 Semiconductor Stocks Set to Capitalize on Generative AI appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-27
|
AMD
|
Advanced Micro Devices (AMD) closed the most recent trading day at $146.07, moving +1.85% from the previous trading session. The stock's change was more than the S&P 500's daily gain of 0.14%. Meanwhile, the Dow experienced a rise of 0.3%, and the technology-dominated Nasdaq saw an increase of 0.16%.
Coming into today, shares of the chipmaker had gained 17.54% in the past month. In that same time, the Computer and Technology sector gained 4.87%, while the S&P 500 gained 4.89%.
Market participants will be closely following the financial results of Advanced Micro Devices in its upcoming release. The company is expected to report EPS of $0.77, up 11.59% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $6.11 billion, reflecting a 9.2% rise from the equivalent quarter last year.
For the full year, the Zacks Consensus Estimates project earnings of $2.65 per share and a revenue of $22.63 billion, demonstrating changes of -24.29% and -4.13%, respectively, from the preceding year.
It's also important for investors to be aware of any recent modifications to analyst estimates for Advanced Micro Devices. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has remained steady. Advanced Micro Devices is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Advanced Micro Devices is holding a Forward P/E ratio of 54.14. This expresses a premium compared to the average Forward P/E of 28.63 of its industry.
Investors should also note that AMD has a PEG ratio of 4.22 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The Electronics - Semiconductors industry currently had an average PEG ratio of 4.2 as of yesterday's close.
The Electronics - Semiconductors industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 205, placing it within the bottom 19% of over 250 industries.
The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.0% per year. So be sure to give these hand-picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-27
|
AMD
|
All eyes have been on artificial intelligence (AI) stocks in 2023, with the market almost singlehandedly triggering a recovery for the Nasdaq Composite after it plunged more than 30% last year.
Macroeconomic headwinds curbed consumer and commercial spending in 2022, leading to a sell-off. However, the launch of OpenAI's ChatGPT in November 2022 made Wall Street bullish about tech stocks again, with countless companies restructuring their businesses to focus on the technology. As a result, the index has soared 43% since Jan. 1.
According to Grand View Research, the AI market is valued at $137 billion, but is projected to exceed $1 trillion by the end of the decade, expanding at a compound annual growth rate of 37%. The significant growth potential suggests it's not too late to invest in this budding industry and profit from its long-term development.
Here are two no-brainer AI stocks to buy before 2024.
1. Advanced Micro Devices
Shares of Advanced Micro Devices (NASDAQ: AMD) have soared 115% year to date. Chipmakers enjoyed the most stock growth amid the AI excitement, as their hardware is crucial for training and running AI models. In fact, AMD's biggest competitor, Nvidia, has seen its shares rise more than 200% this year alongside a spike in chip sales.
AMD's financials have yet to reflect its potential in the sector, with its data center revenue actually dipping just under 1% year over year in the third quarter of 2023. However, that could all change in 2024, when the company will begin shipping what it calls its most powerful graphics processing unit (GPU) ever, designed specifically to compete with Nvidia's offerings.
AMD's new AI GPU, the MI300X, comes at a time when the market has grown desperate for alternatives to Nvidia, with companies looking forward to increased competition reducing the cost of chips. As a result, if the chipmaker can deliver better price-to-performance, it could have a real shot at taking a significant chunk out of Nvidia's estimated 90% market share in AI chips.
The MI300X is already off to a promising start, with Microsoft's Azure announcing in November that it would become the first cloud platform to use the GPU to expand its AI capabilities. Meanwhile, AMD has partnered with Meta, Cisco, and Broadcom to build advanced AI systems.
AMD's soaring stock price, alongside earnings that have yet to see a return on its investment in AI, has made its shares expensive, illustrated by the company's forward price-to-earnings ratio (P/E) of about 52. However, EPS estimates suggest the company still has much to offer new investors.
Data by YCharts
This chart shows AMD's earnings could hit $5 per share over the next two fiscal years. Multiplying that figure by the chipmaker's forward P/E yields a stock price of $265, projecting growth of 90% over the next two fiscal years.
Consequently, AMD's stock is attractive ahead of 2024, and a no-brainer for anyone looking to invest in AI.
2. Alphabet
While AMD looks likely to shake up the AI chip market next year, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) could be poised to see big gains from the software side of the industry.
In early December the company unveiled its highly anticipated large language model, Gemini. According to CEO Sundar Pichai, the new model "represents one of the biggest science and engineering efforts we've undertaken as a company." The new model is expected to be competitive with OpenAI's ChatGPT-4, and capable of crunching various forms of data such as text, video, and audio.
Gemini will likely open the door to countless growth opportunities in AI. The advanced model and in-house brands like Google, Android, and YouTube could prove a powerful combination. Alphabet will have the tech to offer more efficient advertising through Google Search and YouTube, create a Search experience closer to ChatGPT, introduce AI features on its various productivity platforms, expand its range of AI tools on Google Cloud, and more.
Data by YCharts
These charts display the forward price-to-earnings ratios (P/E) and price-to-free cash flow for some of the most prominent names in AI right now. Alphabet has the lowest figures for both metrics, indicating its stock is currently offering the most value.
Alongside free cash flow that topped $78 billion this year and a newly launched AI model, Alphabet is an exciting way to invest in the burgeoning sector. It has the funds to fuel R&D, and is potentially the biggest bargain in AI. The company's stock is a screaming buy ahead of the new year.
Should you invest $1,000 in Advanced Micro Devices right now?
Before you buy stock in Advanced Micro Devices, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
See the 10 stocks
*Stock Advisor returns as of December 18, 2023
John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Dani Cook has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Cisco Systems, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-27
|
AMD
|
Below is Validea's guru fundamental report for ADVANCED MICRO DEVICES, INC. (AMD). Of the 22 guru strategies we follow, AMD rates highest using our Twin Momentum Investor model based on the published strategy of Dashan Huang. This momentum model looks for a combination of fundamental momentum and price momentum.
ADVANCED MICRO DEVICES, INC. (AMD) is a large-cap growth stock in the Semiconductors industry. The rating using this strategy is 100% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
FUNDAMENTAL MOMENTUM: PASS
TWELVE MINUS ONE MOMENTUM: PASS
FINAL RANK: PASS
Detailed Analysis of ADVANCED MICRO DEVICES, INC.
AMD Guru Analysis
AMD Fundamental Analysis
More Information on Dashan Huang
Dashan Huang Portfolio
About Dashan Huang: Dashan Huang is an Assistant Professor of Finance at the Lee Kong Chian School of Business at Singapore Management University. His paper "Twin Momentum" looked at combining traditional price momentum with improving fundamentals to generate market outperformance. In the paper, he identified seven fundamental variables (earnings, return on equity, return on assets, accrual operating profitability to equity, cash operating profitability to assets, gross profit to assets and net payout ratio) that he combined into a single fundamental momentum measure. He showed that stocks in the top 20% of the universe according to that measure outperformed the market going forward. When he combined that measure with price momentum, he was able to double its outperformance.
Additional Research Links
Top NASDAQ 100 Stocks
Top Technology Stocks
Top Large-Cap Growth Stocks
High Momentum Stocks
High Insider Ownership Stocks
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-26
|
AMD
|
InvestorPlace - Stock Market News, Stock Advice & Trading Tips
Shares of tech powerhouse Intel (NASDAQ:INTC) popped higher on Tuesday following an announcement that the government of Israel agreed to give the company a $3.2 billion grant. On the other end of the deal, Intel will build a new $25 billion chip plant in the southern region of the nation. Subsequently, INTC stock popped higher on the underlying win-win prospect.
According to a Reuters report, the deal represents the largest investment ever by a company in Israel. Notably, a bit under 10% of Intel’s global workforce operate in Israel, thus demonstrating a long history of cooperation. Under the latest agreement, Intel will expand at the Kiryat Gat site, where the tech firm already runs an existing chip plant.
Per the company’s statement, the deal is an “important part of Intel’s efforts to foster a more resilient global supply chain, alongside the company’s ongoing and planned manufacturing investments in Europe and the United States.”
Ofir Yosefi, deputy director general of Israel’s Investments Authority, noted that Israel chose a higher grant and tax rate over an offer for a lower grant and tax rate. Following an extensive review and independent analysis to determine economic viability, the assessment concluded that Israel would reap greater fiscal and economic benefits.
INTC Stock May Benefit from a Mutually Agreeable Deal
Naturally, one of the biggest benefits to Israel is the expectation for the deal to yield several thousand jobs. Intel first started a presence in the country in 1974 and now operates four development and production sites. In total, the tech giant employs nearly 12,000 people there while indirectly employing another 42,000 more.
However, the positives don’t just run along a one-way street. For INTC stock, the deal should provide fuel for the underlying company’s competition in the global chip race. Many other semiconductor specialists – including Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) – have jumped ahead in the race as innovations such as generative artificial intelligence bolster demand for advanced chips.
Why It Matters
Currently, Wall Street analysts within the past three months have pegged INTC stock a consensus hold. This assessment breaks down as five buys, 20 holds and three sells. The average price target sits at $40.42, implying more than 19% downside risk.
On the date of publication, Josh Enomoto 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.
More From InvestorPlace
ChatGPT IPO Could Shock the World, Make This Move Before the Announcement
Musk’s “Project Omega” May Be Set to Mint New Millionaires. Here’s How to Get In.
The Rich Use This Income Secret (NOT Dividends) Far More Than Regular Investors
The post The $3.2 Billion Reason Intel (INTC) Stock Is Higher Today appeared first on InvestorPlace.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
2023-12-26
|
AMD
|
Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Micron Technology Inc. (Symbol: MU), where a total of 83,692 contracts have traded so far, representing approximately 8.4 million underlying shares. That amounts to about 48.9% of MU's average daily trading volume over the past month of 17.1 million shares. Particularly high volume was seen for the $90 strike call option expiring March 15, 2024, with 14,271 contracts trading so far today, representing approximately 1.4 million underlying shares of MU. Below is a chart showing MU's trailing twelve month trading history, with the $90 strike highlighted in orange:
Advanced Micro Devices Inc (Symbol: AMD) saw options trading volume of 293,850 contracts, representing approximately 29.4 million underlying shares or approximately 48.8% of AMD's average daily trading volume over the past month, of 60.2 million shares. Especially high volume was seen for the $140 strike call option expiring December 29, 2023, with 18,348 contracts trading so far today, representing approximately 1.8 million underlying shares of AMD. Below is a chart showing AMD's trailing twelve month trading history, with the $140 strike highlighted in orange:
And Adobe Inc (Symbol: ADBE) options are showing a volume of 15,939 contracts thus far today. That number of contracts represents approximately 1.6 million underlying shares, working out to a sizeable 42.5% of ADBE's average daily trading volume over the past month, of 3.7 million shares. Particularly high volume was seen for the $585 strike put option expiring December 29, 2023, with 523 contracts trading so far today, representing approximately 52,300 underlying shares of ADBE. Below is a chart showing ADBE's trailing twelve month trading history, with the $585 strike highlighted in orange:
For the various different available expirations for MU options, AMD options, or ADBE options, visit StockOptionsChannel.com.
Today's Most Active Call & Put Options of the S&P 500 »
Also see:
Institutional Holders of TTP
Target Stock Split History
Funds Holding DTCK
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
|
Subsets and Splits
No community queries yet
The top public SQL queries from the community will appear here once available.