Shares of Advanced Micro Devices (NASDAQ: AMD) soared in September, riding a wave of positive news, a 50-basis-point cut by the Federal Reserve, and a strong tailwind in the semiconductor sector.
According to data from S&P Global Market Intelligence, AMD experienced a remarkable 10% surge in its stock price during the month. The stock outperformed the VanEck Semiconductor ETF, exhibiting a higher growth rate.
AMD’s Winning Streak
AMD has been making significant strides in the AI sector, with its MI300 data center GPU witnessing robust growth in the second quarter. Notably, the company’s announcement of the “Advancing AI 2024” event on October 10, where it plans to unveil its next-generation AMD Instinct accelerators and fifth-gen AMD Epyc server processors, fueled investor optimism.
The stock received a notable boost on September 11 following the announcement, with a 5% jump in its price on high trading volume. Ark Invest, managed by Cathie Wood, also bolstered its AMD holdings by purchasing 45,500 shares in a week.
The subsequent week saw further gains as AMD secured a victory over Intel to design a critical chip for Sony’s PlayStation 6. Citigroup reiterated AMD as a top AI pick, contributing to the positive sentiment. Additionally, Oracle Cloud Infrastructure’s decision to utilize AMD’s Instinct MI300X accelerators provided further validation of the company’s products.
Image source: Getty Images.
Future Outlook for AMD
The AI presentation on October 10 will be closely watched by investors, with expectations for new products that could revolutionize AMD’s position in the data center GPU market, challenging the dominance of Nvidia. A successful execution could pave the way for significant stock growth.
Investment Considerations
Before diving into Advanced Micro Devices stock, it’s crucial to note that the Motley Fool Stock Advisor team has identified the 10 best stocks for investors, with AMD not among them. This underscores the importance of thorough research and diversification in investment decisions.
Reflecting on Nvidia’s phenomenal growth since its listing in 2005, where an investment of $1,000 then would be worth $752,838 today, showcases the long-term potential of strategic investment decisions.
Stock Advisor’s proven track record of outperforming the S&P 500 since 2002 highlights its effectiveness in guiding investors toward lucrative opportunities.
*Stock Advisor returns as of September 30, 2024
Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices. The Motley Fool has a disclosure policy.