Multibagger #5

Name: Advanced Micro Devices, Inc. 

Symbol:  AMD

Price:  $ 158.87

Release Date: Aug 22, 2024

Forecast:

Theme: Value Investing, Warren Buffett

Story: Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. company based in Santa Clara, California, has also expanded into new markets, such as data centers, gaming, and high-performance computers.

Website: https://www.amd.com/us-en/

Earnings and Revenue

Rationale

Through its Xilinx acquisition in 2022, AMD offers field-programmable gate array products.

AMD partnered with Samsung to develop a mobile processor to be used in future products. The processor was named Exynos 2022 and works with the AMD RDNA 2 architecture.

Advanced Micro Devices has been growing earnings at an average annual rate of 2.5%, while the Semiconductor industry saw earnings growing at 27.7% annually. Revenues have been growing at an average rate of 27.1% per year. Advanced Micro Devices's return on equity is 2.4%, and it has net margins of 5.8%.

AMD has high-quality earnings and AMD became profitable in the past.

AMD's earnings (39.4% per year) are forecast to grow faster than the US market (15.2% per year).

Income Statement

Fundamentals, Valuations, Growth

Threats & Risks

• Intel Corporation’s dominance of the microprocessor market and its aggressive business practices may limit ability to compete effectively on a level
  playing field.

• Economic and market uncertainty may adversely impact business and operating results.

• The semiconductor industry is highly cyclical and has experienced severe downturns.

• The demand for products depends in part on the market conditions in the industries into which they are sold. There may be fluctuations in demand for
  products or a market decline in any of these industries.

• The loss of a significant customer may have a material adverse effect on .

• Company subject to risks associated with public health crises, such as pandemics and epidemics.

• The markets in which products are sold are highly competitive.

• operating results are subject to quarterly and seasonal sales patterns.

• If company cannot adequately protect technology or other intellectual property through patents, copyrights, trade secrets, trademarks and other measures, company may lose a competitive advantage and incur significant expenses.

• Unfavorable currency exchange rate fluctuations could adversely affect the company.

Summary

Based on the factors above company is having Multibagger properties. Investor can expect 10-20X returns in a 5-10 year holding period.