Advanced Micro Devices, more commonly known as AMD, was founded in 1969 as a semiconductor company which supplied reliable microchips in the early days of the computer industry. Since its incorporation, AMD has gone on to produce a vast array of computer products and has dominated the Graphics Processing Unit (GPU) market along with its main competitor, Nvidia.
AMD’s 1980 stock price was $2.24, and since then, the company has experienced a long history of price fluctuations and currently sits at a modest $32 per share.
Advanced Medical Devices at a glance
Founded in 1969 by Jerry Sanders and his colleagues, AMD had fairly humble beginnings as a microchip supplier which guaranteed United States Military Standard quality control practices. Over time, AMD developed an abundance of reliable products such as RAM chips, multipliers and logic chips, which pushed them to become a prominent name in the computer and semiconductor industries.
In the company’s 50-year history, AMD has gone through more than a few noteworthy events, including:
- The development of the Am2505 in 1971
- A technology exchange agreement with Intel in 1981
- The acquisition of ATI Technologies in 2006
- The foundation of GlobalFoundries Inc., a partnership with Advanced Technology Investment Co. in 2008
- The acquisition of SeaMicro in 2012
- The 2014 reorganization of the company into two groups: computing and graphics and enterprise
History of AMD
As mentioned above, AMD’s stock history has been one of the extreme and frequent fluctuations. For example, from 1983 to 1987, stock prices remained fairly stagnant (in the $12-$16 range) until steadily declining to an abysmal $1.90 towards the end of 1990.
More recently, however, AMD’s stock prices seem to be on an upward trend, as it has climbed from $1.77 at the end of 2015 to a current price of $32 (as of September 2018).
If you had invested at the beginning of this trend, you would be left with $18.07 for every dollar you invested.
Should you buy AMD stock?
You’ll have to make that decision for yourself. But here are some key facts.
Pros of purchasing AMD stock:
- AMD currently sits just behind Nvidia as the most prominent name in the GPU industry thanks to the popularity of its AMD Radeon graphics cards.
- AMD has spent a lot of time in recent years developing exciting and competitive products. Earlier this year, the company announced the second generation of the Ryzen CPU, which AMD labeled as the most powerful desktop processor in the world.
- AMD’s recent success in the GPU market has brought it back from years of losses. As AMD continues to transition into this market, it is likely that the company’s profits will continue to grow.
Cons of purchasing AMD stock:
- While investors seem to be buying into the AMD hype, many analysts are convinced that recent stock prices are as high as they will ever be. For example, BMO Capital Markets recently lowered its price target for AMD to $15.
- AMD has significant competition, and it’s unclear if it will be able to outperform its competitors. Nvidia continues to dominate the GPU market without any signs of slowing down, and Intel is still the dominant name in the processor and microchip industries.
- AMD’s current stock price is far above what most analysts would consider it to be worth. The consensus target of around $18, which is generally higher than the stock price, is currently nearly half of the actual price.
How to purchase AMD
If you’re convinced that AMD is a worthwhile investment, you can purchase shares of the company without much effort. To invest in AMD, follow a few simple steps:
1. Decide how much you want to invest
The first step to investing in any company is deciding how much you plan to purchase based on how much money you have available and the current price per share of the stock. You’ll need to provide your broker with this information so it can place your order.
2. Find a suitable broker
As AMD is a publicly traded company, it can be purchased through just about any brokerage firm. As a result, it’s pretty much up to you to decide which brokerage suits your needs the best.
Benzinga went ahead and made our picks for the Best Online Brokerages of 2018. If you’re a new trader and don’t know where to start, take a look at some of our top-ranked stock brokerages below.
|Broker||Best For||Commissions||Account Minimum||Choose your platform|
||$4.95 volume discount available||$0||
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1 Minute Review
If investors are on the hunt for a bargain broker, Ally Invest could be the one. With low commissions across the board, Ally Invest (formerly TradeKing) stops potential investors in their tracks with its especially low mutual fund commissions. Commissions on stocks and ETFs are notoriously inexpensive as well, and for more active traders or those with larger account balances, commissions can dip as low as $3.95 per trade.
$3.95 per stock trade for Active Traders at Ally Invest
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1 Minute Review
E-Trade is best known for its user-friendly browser, desktop and mobile trading platforms and its extensive research and educational information. E-Trade may not have the lowest commissions compared to discount online brokers, but customers certainly get their money’s worth from E-Trade’s comprehensive offerings.
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1 Minute Review
This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.
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3. Place your order
Your broker will place an order on your behalf, based on the amount you have determined you want to invest. Depending on your brokerage, the process will look a bit different.
Future outlook for AMD stock
AMD’s future is unclear. While the company seems committed to growing its market share through the development of new and exciting consumer products, it faces tough competition from Nvidia and Intel. The competition is getting fierce enough that it may begin to compress margins.
While the company continues to shed debt, AMD is not in as solid a financial position as Intel. In addition, the company no longer owns its manufacturing processes, which leaves it at the risk of its suppliers.
Even though the company faces dozens of challenges, discussions from management don’t indicate any major future concerns. Much of its success going forward will likely hinge on broader market performance and general tech trends.