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Why I Like AMD's Plan to Address the Chip Shortage Problem

By Jose Najarro – Sep 17, 2021 at 7:00AM

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AMD's CFO recently shared which products are taking priority in the supply chain.

Today's video focuses on how Advanced Micro Devices (AMD -2.67%) will prioritize certain products during the current chip shortage to maximize returns. Online reports have stated that Devinder Kumar, AMD's CFO, discussed that its focus would be toward server products and mobile processors. Here are some highlights from the video. 

  1. AMD reported 99% year-over-year growth during its most recent second-quarter earnings, driven by solid demand for all of its products. AMD guided for roughly 60% year-over-year growth for its full year, even with supply constraints in the semiconductor industry. 
  2. The Enterprise, Embedded, and Semi-Custom segment, which includes server processors, was up 183% year over year. Server products include its EPYC processors, which have had five straight quarters of record server processor revenue. As cloud demand continues to accelerate, AMD needs to continue to increase its market share.
  3. With the start of the school year, the incoming holiday season, and hybrid working becoming a standard, the demand for laptops remains strong. Investors could see the benefits of AMD focusing on the mobile processor market. 

Click the video below for my full thoughts and analysis. 

*Stock prices used were the premarket prices of Sept. 16, 2021. The video was published on Sept. 17, 2021.

 

Jose Najarro owns shares of Advanced Micro Devices. The Motley Fool owns shares of and recommends Advanced Micro Devices. The Motley Fool recommends Intel and recommends the following options: long January 2023 $57.50 calls on Intel and short January 2023 $57.50 puts on Intel. The Motley Fool has a disclosure policy. Jose is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Stocks Mentioned

Advanced Micro Devices Stock Quote
Advanced Micro Devices
AMD
$68.59 (-2.67%) $-1.88
Intel Stock Quote
Intel
INTC
$28.24 (-0.70%) $0.20

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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