Advanced Micro Devices, Inc. (NASDAQ: AMD)
Advanced Micro Devices has had a tough time in the market over the past five years. Through this time, the stock has seen more than 70% of its value disappear into the abyss. However, the year 2016 has been incredibly good to the company. So far this year, the stock has climbed by nearly 40% and, thanks to recent announcements, we’re likely to see further gains. Just days ago, AMD made a big announcement with regard to virtual reality that’s likely to send the stock soaring. Today, we’ll talk about the announcement, what we’ve seen from AMD since, and what we can expect to see from the stock moving forward.
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Advanced Micro Devices Moves Toward Virtual Reality
On Monday, AMD had an incredible day in the market after unveiling new virtual reality hardware and software features. During the showcase, the company showed off new graphics processing unit technology. They also announced the launch of a new GPU certified program. Perhaps most importantly, AMD made a big statement in one of their announcements. They stated that they believe they hold about 83% market share of home entertainment virtual reality systems. This may seem far fetched and hard to believe, but in reality it is definitely possible. After all, VR is a very new industry and it requires incredibly advanced chips. Advanced Micro Devices has the chips and is surely a big player in the industry. In a statement, Raja Koduri, Senior Vice President and Chief Architect at the company’s Radoeon Technologies Group had the following to say:
“AMD continues to be a driving force in virtual reality… We’re bringing the technology to more people around the world.”
How The Market Reacted To The News
As investors, we know that the news moves the market. When there is good news released with regard to a publicly-traded company, we expect to see gains. Adversely, when bad news is released, we expect to see losses. Naturally, Advanced Micro Devices’ announcement that it is a major player in the virtual reality space is incredibly good news, and is sending the stock upward. In fact, since Monday, we’ve seen strong upward trends on the stock that are continuing in the market today. Currently (10:50), AMD is trading at $2.76 per share after a gain of $0.13 per share or 4.94% thus far today.
What We Can Expect To See Moving Forward
As AMD continues to dominate in the market as it has done for most of the year, investors are starting to ask whether or not they should invest in the company. The truth is that I understand the hesitance associated with investing in AMD. As mentioned above, the stock has been heading downward over the past 5 years. However, at this point, I believe that the downward trends are over for AMD. First and foremost, the company’s virtual reality computer chips are incredibly important to the vast majority of VR systems. Because virtual reality is already incredibly popular, I would imagine that this is going to be a very profitable space for all involved, including Advanced Micro Devices. While virtual reality is a big driver, I believe that another big driver of movement is going to be computerized gaming and, possibly, even drones. The simple fact is that at this point, AMD has carved out a clear niche, and it just so happens to be a very profitable one. So, I’m expecting to see gains in the value of the stock.
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What Do You Think
Where do you think AMD is headed moving forward and why? Let us know your opinion in the comments below!
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