At first, it looked as though Advanced Micro Devices (NASDAQ: AMD) would face selling pressure at the $11 range (at its 50 day moving average) and find resistance at its 200 day average (of around $12). So at $13.54, the sky is the limit.
The stock’s 23x forward P/E puts the stock at a significantly higher valuation. Intel (NASDAQ: INTC) trades at a 14x forward P/E and its growth is more consistent compared to AMD.
Fortunately, AMD’s near-term growth from Ryzen 2, EPYC, and Vega graphics cards are improving. Management raised its outlook, giving bulls renewed optimism over AMD’s future. With the stock breaking above its one-year downward trend, holding the recent gains on the stock market will speak volumes. Short-selling is increasing as AMD stock rises.
The insatiable demand for computing power and servers will not end. Hewlett-Packard Enterprise (NYSE: HPE) reported strong demand for servers. It is starting to offer scalable AMD solutions. Such EPYC-powered builds will offer customers better products at lower prices. HPE has more room in stacking higher-powered components, offering more value than Intel-powered servers.
HPE is not the only EPYC supplier. Dell, Baidu, and Microsoft through Azure VMs, are the other companies that are giving their customers a choice besides Intel. In a world where there are now two major suppliers, competition is a good thing that will drive sales for both AMD and Intel.
Tech Insider
