In the tumultuous world of stock market and investment, it is crucial to keep track of the changing scope and direction of various companies. One such tech giant that has recently made shudders on the financial market is Advanced Micro Devices, Inc. (AMD). Last week, AMD plunged to a critical support level, creating ripples amongst investors and speculators alike.
When a company’s shares drop to a ‘critical support level’, this refers to a crucial point in the stock pricing where historically buy-side pressure has helped to bolster its falling costs. If a support level is established, buyers can invest with different degrees of confidence that the stock price won’t slip any further.
In AMD’s case, the phenomenon is indeed a double-edged sword. On one side, there’s a wave of fear, uncertainty, and doubt. On the other side, it may just be an inviting opportunity for investors to buy on the dip and go long on the stock.
Designed for long-term investment strategies, ‘going long’ on a stock means buying shares with the anticipation that its price will increase, ultimately providing high return potential.
One of the main reasons behind the AMD’s plunge is the comparative slowdown in the semiconductor sector. Market competition – especially that from tech behemoth Intel – coupled with global chip shortages due to the COVID-19 pandemic have seemingly impacted AMD’s standing.
However, on the brighter side, AMD has a string of positive factors that can make this moment a potentially advantageous period to ‘go long’.
Strong Product Portfolio: AMD has a robust product portfolio. Its innovative approach in designing processors for the server, desktop, and mobile markets has it outpacing competitors. Cutting-edge products like the RDNA 2 architecture featuring in the latest Xbox Series X and PlayStation 5 consoles have made AMD a preferred partner to many top-tier tech companies.
A Powerful Supply Chain: Even amid worldwide component and chip shortage, AMD confirmed that it has established a powerful supply chain network and doesn’t anticipate significant disruption in its operations. This statement offers investors the assurance that the company’s capability to deliver won’t be severely hampered in the current crisis.
Solid Financial Performance: Even though the stock prices have faltered, AMD’s financial performance remains solid. The company recently announced a record annual revenue of $11.42 billion, up 45 percent YoY and a breathtaking increase of 108 percent as compared to 2018.
Investment in Research & Development: AMD continues to invest in research and development to outpace its competitors. The company’s advanced Zen and RDNA architecture are expected to play a vital in fueling its growth engine in the upcoming years.
While plummeting to a critical support level can seem devastating, in AMD’s case, it doesn’t necessarily signal doom. The company’s solid groundwork and robust operations provide a ray of hope for its future prospects. For investors who are capable of stomaching short-term volatility and focussing on long-term gains, this might be an encouraging time to ‘go long’ on AMD.
Remember, every investment comes with its own set of risks. Before you choose to ‘go long’, it’s important to have a comprehensive understanding of the company’s financial health and market position. Use due diligence to keep an eye on AMD’s future moves, and consult with a financial advisor if necessary. After all, in investment, it’s always the well-informed bet that leads to victory.
