Undervalued AMD Stock Price Could Soar in 2016
Move over Intel Corporation (NASDAQ:INTC), because Advanced Micro Devices, Inc. (NASDAQ:AMD) is posting big gains. This week AMD’s stock price skyrocketed on the back of a few critical developments. The company has not had an easy time translating its technical proficiency into stock gains in the best of times, but the latest moves by this company might mean that this is the perfect time to take another look at AMD stock.
Before I go into how the AMD stock price might double or even triple in the near-term, it’s important to take a step back and examine how this undervalued stock dipped. AMD stock sat at roughly $40.00 in 2006, while today it’s in the range of $2.40 per share. You might be asking, “What happened?”
This is a great question, but before you discount this high-value stock, rest assured that its nosedive over the last decade has little to do with the company’s products. Let me explain.
Could AMD’s New Graphics Cause Stock to Rebound?
There’s no escaping the fact that AMD has always faced an uphill battle in establishing itself in its market space, which is the design and production of central processor units (CPUs) for PCs and other assorted devices. However, the company’s archrival, Intel, casts quite the long shadow in this marketplace and is the undisputed leader, with financial assets far greater than AMD’s. (Source: “AMD Gives Tough Competition to Intel, Once Again!” Gizmoids, November 7, 2015.)
But don’t get pessimistic just yet, because there’s still hope for AMD stock.
The company recently announced a new graphics software suite that just might buoy slowing sales. The all-new “Radeon Software Crimson Edition,” which is advertised as revolutionary for both media editing and gaming, is said to be among the most advanced of its kind. AMD’s new graphics suite contains a dozen new or improved features, a more than 20% improvement in accelerated graphics performance levels for gaming, and adjustability for energy efficiency, which is reported to essentially halve electricity demand. But that’s not all; extreme stability even under huge graphical computing demand loads is also part of the package. (Source: “HotFix Coming Today For Radeon Software Crimson Edition Bug That’s Killing Graphics Cards,” Forbes, November 30, 2015.)
With this sort of product heading its lineup in the holiday shopping season, AMD might just have what it takes to soar in 2016.
AMD also announced its commitment to manufacturing what are arguably among the top graphics processors in the world and it appears that this time, it could very well have hit a homerun. The upcoming surge in AMD’s stock price after the holiday shopping season could be just the beginning, however. Advanced Micro Devices is obviously now viewing the quality of its products as one of the company’s biggest priorities, producing easy-to-use software and hardware that actually delivers excellent results for a reasonable price.
The company’s Radeon products are concentrated on the vertical integration of graphics-related computer processes, while at the same time achieving ambitious performance benchmarks and simultaneously staying energy-efficient. In essence, what AMD’s new processor does is deliver the highest performance, while simultaneously remaining one of the most energy-efficient.
Translation: AMD’s new Radeon products are delivering the most performance per watt of electricity used.
So AMD is a company with a revolutionary and innovative lineup of products, as well as one that focuses on being environmentally conscious? Now that’s what I call a winning combination, one that could send the AMD stock price soaring in 2016.
The Bottom Line on AMD Stock
AMD’s innovative new products are coming out just as the holiday shopping season is steaming at full speed ahead. It now looks as if the company may have found the winning combination, which could cause AMD stock to soar. When you really think about it, the AMD stock price is looking vastly undervalued right now and it could very well surge on the back of these innovative and energy-efficient offerings. Once you factor in the seasonal rise in sales volume, it’s no surprise that I’m highly bullish on AMD’s stock price for 2016.