About the AMD group:
The AMD group or Advanced Micro Devices specializes in the creation of semiconductors and develops informatic processors and related technologies for businesses and consumers. The company designs and integrates technologies for intelligent devices such as computers, game consoles and computer servers.
It operates in the informatic and graphic solutions sectors of the company.
AMD’s main competitors:
The AMD group is a leader manufacturer and designer of semiconductor and microprocessors in the world. As such, it competes with several other companies specialized or not in this field. AMD currently ranks twelfth in the world ranking of these manufacturers in terms of turnover. To better understand the competition in this sector and which are the most competitive companies compared to AMD, here is the world ranking of companies in this sector according to their turnover.
- Intel Corporation (United States)
- Samsung Electronics (South Korea)
- Qualcomm (United States)
- Micron Technology (United States)
- Hynix (South Korea)
- Toshiba (Japan)
- Texas Instruments (United States)
- Broadcom (United States)
- STMicroelectronics (France)
- Renesas Technology (Japan)
- Infineon (Germany)
- AMD (United States)
- NXP (Netherlands)
- Media Tek (Taïwan)
- Sony (Japan)
- Freescale (United States)
- NVidia (United States)
- Marvell Technology Group (United States)
- ON Semiconductor (United States)
- Analog Devices (United States)
The turnovers and the innovations of these different groups are of course to be taken into account in your analysis of AMD’s course of action and from a fundamental point of view.
AMD mains partners:
To finish here is a list of some of AMD’s recent partnerships:
- In 2015, AMD created a joined venture with the Fujitsu Microelectronics group to consolidate its activities of semiconductor testing and assembling.
- In 2016, the AMD group stablished a joint venture in China with the company Thatic (Tianjin Haiguang Advanced Technology Investment Co), an investment fund owned by the Chinese Academy of Sciences. The contract also concerned a licensing agreement that reported 293 million of dollars to AMD. AMD will thus supply THATIC with patents of electronic chips for servers that are adapted to the Chinese market.
AMD share price analysis:
This title was first introduced to the stock market in 2015 and has experienced only slight variations since then, with a first drop on July 2015 and a gradual recovery that is still visible today.
Important stock market data about AMD shares:
Before you start trading AMD shares online, here is some information that will give you a better insight about this title:
- In 2017, AMD had a total market capitalization that reached 10 792.08 MUSD.
- The number of securities issued by AMD is currently in circulation on the stock market is in the order of 38,729,470.
- The price of AMD’s shares is currently listed on the Nasdaq Select Market All markets in United States.
- The company AMD is also part of the American Nasdaq 100 stock index and therefore ranks among the 100 American companies with the highest market capitalization in this sector.
- AMD’s shareholding is comprised of 7.67% of the Vanguard group, 5.06% of BlackRock Fund Advisors, 2.68% of BlackRock Institutional Trust Company, 2.62% of State Street Corporation, 2.15% of the shares of Oppenheimer Founds, 1.65% of the shares of FMR LLC, 1.52% of the shares of Wellington Management Company, 1.23% of the shares of Renaissance Technologies LLC, 1.23% of the shares of Arrowstreet Capital Limited Partnership and 1.17% of the shares of Neorthern Trust Corporation
Economic and financial history of the AMD Company:
To be able to correctly interpret the historical charts of AMD shares and to deduce the future changes on the price of this title, it is of course essential to check the major trends observed and the historical facts that have marked this company. So, here is a reminder of the important dates of recent decades.
- In 1969, AMD was founded with a starting capital of 100 000 dollars by Jerry Sanders, Edwin Turney, John Carey, Sven Simonsen, Jack Gifford, Frank Bote, Jim Giles and Larry Stenger. That same year, the group specialized in semiconductors, microprocessors and graphic cards moved to Sunnyvale, California and produced its very first integrated circuit, the AM9300. This circuit is actually a 4-bit MSI shift register.
- In 1972, AMD launched a new product, the AM2501. It installed and put in operation its first production unit outside the United States, in Penang, Malaysia that same year.
- In 2003, the AMD group associated with the Fujitsu group in order to create the Spansion Society. This includes the flash memory activities of the two companies. AMD remains major shareholder of this joint venture with 60% participation.
- In 2005, AMD and Fujitsu finally sold their participation in the Spansion society which then became an independent society which still exists under the same name.
- In 2006, the AMD group proceeded to buy the ATI Technologies company for a total of 5.4 billion dollars. Always in 2006, AMD climbed to the 8th place in the ranking of the largest manufacturers of semiconductors just after Intel, Samsung, Texas Instrument, Toshiba, STMicroelectronics, Renesas and Hynix.
- In the beginning of 2007, the positioning of AMD in this same ranking dropped significantly and the company ended up in the 18th place. AMD became however the number two in the provision of microprocessors for PC in architecture x86 computers just after Intel.
- In 2009, AMD made its big comeback in the sector of semiconductors with a stock market share price that climbed to 9.95 dollars. It should be remembered that its value at the beginning of the year was only 1.86 dollars, so it has an increase of 435% in one year.
- Today, the AMD group ranks second in the graphics card market on the market just after Nvidia and occupies the third place in the GPU market before Intel and Nvidia following its takeover of ATI.
The advantages and strengths of AMD shares as stock market assets:
A bullish strategy on the AMD share price, notably as a long term position, should above all be based on a comprehensive analysis of the strengths of this company. This is why we offer you here a complete review of the strong points of this asset and its advantages that can enable this group to continue its growth.
Firstly, the AMD group benefits from an extremely reliable list of suppliers that assure high quality elements and components at the best price thereby enabling the company to avoid bottlenecks in the supply chain.
AMD also benefits from successful experience in the integration of companies with complementary activities through acquisitions and mergers. These integrations have notably enabled the group to streamline its operations and build a reliable supply chain. In the same way, the strategic acquisition of brands by AMD has enabled it when necessary to develop other product categories.
The AMD group has also managed to achieve significant performance in new markets. Due to this well managed expansion AMD can generate new sources of revenue and reduce the risk associated with the cyclical markets in which it generally operates.
Investors also appreciate the fact that the AMD Group boasts a significant available capital. Due to this sizable capital the group benefits from sufficient resources to successfully launch and pursue new projects and innovations. It is also important to note here that AMD has considerable experience in the development of new and innovative products with numerous patents to its name.
Due to an automated strategy of its activities, AMD has also succeeded in maintaining a consistent quality in its products. This automation has also enabled the company to increase or decrease its production according to the market demand.
To conclude, the last advantage of the AMD Company, but certainly not the least, is related to its strong product reseller community. The group has in fact been able to develop a true corporate culture with its resellers who take it upon themselves to publicise the AMD products and create internal teams of sellers for these specific products.
The disadvantages and weak points of the AMD shares as a stock market asset:
Although the advantages of AMD shares and the strengths of the group appear numerous it is important also to take into account, when implementing your strategies, the weaknesses and disadvantages of this company which can lead to obstacles for its future growth. Here therefore is a list of this group’s weaknesses that you need to know.
Among the major weaknesses of this asset we note the profitability rate and net contribution percentage of AMD which are generally lower than those of their competitors. Another point, the financial planning of the company is incorrectly managed. In fact, the asset and liquid asset ratio shows that the group could use its capital in a more effective manner than it does at present.
AMD also displays certain weaknesses relative to the management of product demand, often badly forecast, which lead to missing out on certain sales opportunities contrary to its competitors who succeed in correctly predicting the future needs of their clients. AMD is therefore lacking in performance concerning the management of its stock which is higher internally than through the channels.
Another point, AMD has not succeeded in meeting new challenges presented by newcomers in new sector activities and has lost position on certain niche market sectors. The company therefore needs to implement an internal review system with onsite sales teams to conquer new markets.
The turnover rate in the employment of the AMD Company is also significant compared with that of its major competitors. Therefore the company has to continually invest in the training of these employees which makes it less competitive than other companies in this sector that appear to better manage the company entrepreneurial spirit.
Finally, and despite major investment capabilities, the AMD Group does not invest sufficiently in R & D compared to other major players in this sector. Although investments in research and development remain above average, the company is not competitive in respect to this compared to the more dynamic companies in this activity sector that are more innovative. AMD appears to concentrate more on tried and tested products in this market on which it appears to base its strategy.
How to achieve a pertinent fundamental analysis of the AMD share price?
To conclude this article let us now look at the opportunities and threats facing the AMD Group in the coming years. In fact, these are the elements that should be primarily monitored to achieve a complete and pertinent technical analysis of this asset.
The opening of emerging markets with an adoptive policy towards new technological standards and a free trade agreement enable AMD to take position in promising geographical sectors. However, local distributors benefit in terms of strength and presence which represent a new threat to AMD in these new markets with higher margins paid to these distributors.
The development of ecommerce could also enable AMD to gain new clients and generate new income. To do this the group should continue to invest heavily in its online platform. It is therefore recommended to monitor the economic impact of this online investment in the years to follow.
We will of course keep a close eye on AMD’s technological developments and its resolve to gain position on the new markets that are opening in response to new requirements that could represent a new source of income for AMD that should do everything possible to seize this opportunity. We are also watching the pricing strategy of AMD and the development of products in different categories that will enable the company to touch a larger part of the consumer community.
The AMD Group could also benefit from a decrease in the shipping costs of its products which would have a positive impact on the sale price of the latter. The AMD group could thereby improve its profitability and develop its position on new market sectors.
Naturally it is also important to monitor the acquisitions and strategic alliances of AMD with other companies that could assist the company in improving its position in new sectors with the development of innovative products.
Of course, certain threats are also highly present in the near future of AMD. For example, the group is subject to isolationist policies in the United States that could reverberate with other countries and thereby reduce the export sales of this company.
AMD could also be subject to legal action in other markets according to the laws which differ in various countries and the continuous fluctuations in product standards on these markets.
The competition from other companies in this activity sector is also high with a stable profitability that has increased the number of players in the industry over recent years. Due to this, the price has been subject to a falling trend which weighs upon the profitability of the company and its sales.
It is also recommended to closely monitor the prices of major commodities that can have a significant influence on the profitability of the AMD production chain. Even more so as recent regulatory modifications relating to the environment could create a negative impact on the price of certain product categories.
Conclusion: Using the diverse information we have revealed here you will now be in a position to achieve pertinent technical and fundamental analyses of the AMD share price. You should therefore now be more able to implement a winning strategy.