Advanced Micro Devices (NASDAQ:AMD) stock has declined 20% over the past month. Investors should use the pullback as an opportunity to buy shares hand over fist.
The current drawdown in AMD stock is due to market volatility and a pullback among all semiconductor securities. Nothing has changed to alter the growth trajectory of Advanced Micro Devices.
On the contrary, the company continues to expand its market share in the hotly contest artificial intelligence (AI) sector as it rolls out new microchips and semiconductors. Investors should also keep in mind that, despite the current dip, AMD stock is up 452% over the last five years, making it a long-term winner.
Another New AI Chip
On April 16, Advanced Micro Devices unveiled new semiconductors for AI-enabled business laptops and desktop computers. The new chips will be integrated into laptops and desktop computers made by companies such as HP (NYSE:HPQ) and Lenovo by the end of the current second quarter. In launching the new chip, AMD said it is trying to expand its share of the burgeoning but lucrative AI personal computer (PC) market. The new chips will enable PCs to run large-language models and AI directly without the need for cloud-computing.
Analysts and company leaders seem to agree that AI-enabled PCs will help to revive the market for laptops and desktops in coming years. AMD rival Intel (NASDAQ:INTC) has said that it plans to ship 40 million AI PCs this year. The new computer chips from Advanced Micro Devices are the latest in a series of products the company has introduced to capitalize on booming AI demand, and to better compete against archrival and industry leader Nvidia (NASDAQ:NVDA).
Strong Financial Results
At the end of last year, AMD launched a new series of microchips called the “Ryzen 8040” that are aimed at boosting AI applications by up to 60%. AMD’s new MI300X accelerator microchip is also now available. That chip is used in data centers and servers, and is meant to compete head on with Nvidia’s AI data center chips. Tech giants such as Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) have placed big orders for AMD’s new chips as they power their own AI ambitions.
While it’s still early days, AMD’s raft of new AI microchips and semiconductors is already having a positive impact on the company’s financial results. At the end of January, AMD reported earnings per share (EPS) of 77 cents, which matched analysts’ expectations. Revenue for the fourth quarter of 2023 totaled $6.17 billion versus $6.12 billion that was forecast on Wall Street. Last October, AMD said it expected $2 billion in A.I. chip sales this year. It now expects $3.5 billion of A.I. chip sales in 2024 as demand rises exponentially.
Buy AMD Stock
Advanced Micro Devices is a company firing on all cylinders right now. In less than six months, AMD has rolled out multiple new chips and semiconductors designed to power the most advanced AI technologies. Competing directly against industry leaders such as Nvidia and Intel, AMD is more than holding its own. While the share price has pulled back in recent weeks, it is not likely to be down for long. As such, investors should take advantage of the current situation and buy AMD stock.
On the date of publication, Joel Baglole held long positions in MSFT and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.