The Actual Recommended Trade.....
** OPTION TRADE: Buy AMD
APR 09 2021 80.000 CALLS at approximately $1.00.
The Profit Explained…..
Options Members” entered a trade on Advanced Micro Devices
01, 2021 for $1.08, at market opening.
By 3.00pm the price of the option had
hit $2.21 – a nice profit of 104.6%.
TOTAL PROFIT FOR THE DAYS TRADING IS 104.6%.
Why The Trade Recommendation On Advanced Micro
Clara, Calif.-based company Advanced Micro
Devices, Inc. (NASDAQ:AMD), a global semiconductor company, has been on a roll under the
leadership of CEO Lisa Su, who took over in 2014.
last few years, it has delivered competitive chip products for PC gaming and
data centers. Furthermore, AMD has a strong product pipeline. In particular,
its Zen-based 7-nanometer (nm) processors could take more market share away
from Intel, which has suffered delays in releasing its 7 nm chips.
Revenue surged last year, thanks to consumers
buying AMD-powered laptops for working from home and strong demand for server
However, AMD stock hit a 52-week high in
January this year, but the price for this high-flying chipmaker has pulled back
over 20% since then thanks to a variety of factors such as the broader sell-off
in tech stocks and rival Intel's (NASDAQ:INTC) resurgence under new leadership.
The Major Catalysts for
Looking at Q4, AMD earned $570.00
million, a 26.95% increase from the preceding quarter. Advanced Micro Devices
also posted a total of $3.24 billion in sales, a 15.82% increase since Q3.
Advanced Micro Devices earned $449.00 million, and sales totaled $2.80 billion
Advanced Micro Devices reported Q4
earnings per share at $0.52/share, which beat analyst predictions of
Return on Capital Employed.....
In Q4, Advanced Micro Devices posted
an ROCE of 0.1%.
Return on Capital Employed is an
important measurement of efficiency and a useful tool when comparing companies
that operate in the same industry.
For Advanced Micro Devices, the
return on capital employed ratio shows the number of assets can actually help
the company achieve higher returns, which should payoff from long-term financing
Intels’ Market Dominance.....
For several years now, Advanced
Micro Devices has eaten away at Intel’s market dominance in the CPU segment.
Intel, however, with a new CEO at the helm, has been devising its comeback
However, Northland analyst Gus
Richard calls Intel’s latest move a “strategic faux pas” that plays right into
its CPU rival’s hands.
“We do not believe TSMC will
relinquish its manufacturing lead to INTC any time soon and process technology
leadership drives product leadership and GM higher,” said the analyst. “INTC
expansion into the foundry market will increase AMD as a priority for TSMC and
INTC will be persona non grata. For this reason, we expect AMD's market share
momentum to continue.”
AMD’s and Xilinx’ – soon to be part
of AMD - leading-edge volume is produced at TSMC, more wins for them means more
business for TSMC.
“This will likely result in AMD
getting earlier access to technology and better capacity allocation, cementing
the Company's x86 process technology leadership for the foreseeable future,”
As such, Richard reiterated an
Outperform (i.e. Buy) rating on AMD shares along with a $96 price target. The
analyst, therefore, anticipates gains of 24% over the coming months.
Also, AMD has been the subject of a
number of recent analyst reports.....
- Rosenblatt Securities raised their
price objective on shares of Advanced Micro Devices from $120.00 to $135.00 and
gave the stock a “buy” rating in a research note on Wednesday, January 27th.
- Wedbush increased their target price
on shares of Advanced Micro Devices from $100.00 to $110.00 and gave the stock
an “outperform” rating in a research report on Tuesday, January 12th.
- Truist increased their target price
on shares of Advanced Micro Devices from $96.00 to $101.00 in a research report
on Wednesday, January 27th.
- Finally, Barclays raised their price
target on shares of Advanced Micro Devices from $115.00 to $120.00 and gave the
company an “overweight” rating in a report on Wednesday, January 27th.
Three equities research analysts
have rated the stock with a sell rating, eight have issued a hold rating and
twenty-one have assigned a buy rating to the company’s stock. Advanced Micro
Devices currently has an average rating of “Buy” and an average target price of
The Pullback Is A Positive.....
One look at the pace of AMD's growth
and its outlook for the year tells us that the recent sell-off in the stock may
not be justified. The chipmaker ended 2020 on a high and expects to deliver
massive growth once again this year.
The change in a company's future
earnings potential, as reflected in earnings estimate revisions, and the
near-term price movement of its stock are proven to be strongly correlated. The
influence of institutional investors has a partial contribution to this
relationship, as these big professionals use earnings and earnings estimates to
calculate the fair value of a company's shares.
Advanced Micro Devices is expected
to earn $1.93 per share for the fiscal year ending December 2021, which
represents a year-over-year change of 49.6%.
Analysts have been steadily raising
their estimates for Advanced Micro. Over the past three months, the Consensus
Estimate for the company has increased 7.7%.
For Advanced Micro Devices, rising
earnings estimates and the consequent rating upgrade fundamentally mean an
improvement in the company's underlying business. And investors' appreciation
of this improving business trend should push the stock higher.
AMD can be expected to raise its
game by the time Intel's 7nm chips hit the market by transitioning to the
competing 5nm manufacturing node within the next couple of years. A smaller
processing node will allow Advanced Micro Devices to pack more transistors
closer to each other, leading to improved computing performance and lower power
Therefore, Advanced Micro Devices
can remain ahead of Intel once it makes the transition to a smaller 5nm process
node. Chipzilla is unlikely to regain its technology lead until the launch of
its own 5nm process, the timeline for which is unknown right now. As it turns
out, AMD's foundry partner Taiwan Semiconductor Manufacturing is reportedly
working to increase the production capacity of 5nm chips. That should bode well
for AMD, as it is expected to become TSMC's second-largest customer and enjoy
stronger bargaining power.
Additionally, AMD can be expected to
keep up the pressure on Intel in the data center space after the launch of its
latest EPYC server processors. AMD claims that the latest EPYC 7003 processors
based on the 7nm process are twice as fast as Intel's competing chips.
Third-party tests conducted by AnandTech indicate the same.
More importantly, AMD has a solid
lineup of clients using the latest EPYC server processors. They include Amazon,
Cisco, Dell Technologies, Alphabet's Google, Microsoft, Lenovo, and Tencent. So
it won't be surprising to see AMD log big gains in the data center market in
both the short and the long run.