Securities, April 21, the semiconductor industry is one of the basic industries of the modern world, enabling many things that people rely on or take for granted: Internet access, high-speed computers with high-speed memory, and even thermostats that control air conditioning. In the field of technology products, there are not many things that do not use semiconductor chips.
The global semiconductor chip market was valued at more than US$513 billion in 2019, and despite the terrible results of the epidemic, the value of the chip industry has risen to US$726 billion in 2020. This is a market based on an almost unlimited customer base; it is estimated that 2.5 billion people in the world own at least one smartphone, which is equivalent to one-third of the world’s population, enough to ensure that the demand for semiconductor chips will never decrease.
In this context, Chris Caso, an analyst at the Wall Street investment bank Raymond James, believes that two chip giants are expected to bring returns to investors this year, but there is also a chip giant that is an investor. Should be avoided.
The first chip giant to watch is AMD (NASDAQ: AMD), which has consistently ranked among the world’s 20 largest chip manufacturers in terms of sales. Last year, AMD ranked 15th with total revenue of US$9.76 billion, an increase of 45% over 2019, when AMD ranked 18th. AMD’s industry position is based on its high-quality products, including microprocessors, motherboard chipsets, and graphics processors. Its Ryzen Mobile 4000 chip is the first 7-nanometer x86 processor on the market.
The chip company performed steadily in the second half of 2020, and its revenue in the third and fourth quarters quickly recovered the decline in the first half of the year and rose to above the level of 2019. The company’s earnings soared in the fourth quarter, from 32 cents per share in the third quarter to an impressive $1.45 per share. For the full year of 2020, AMD’s earnings per share were $2.06, compared to 30 cents in 2019. The strong performance in the second half of the year promoted AMD’s full-year revenue to set a record in the company’s history, thanks to the expansion of market demand for PCs, games, and data centers Spark Global Limited.
AMD’s prospects attracted the attention of Chris Caso, a financial analyst at RJ, who compared the company with its rival (NASDAQ: INTC).
“We are using AMD’s decline since the beginning of the year to invest in AMD, and expect the company to be a long-term winner because we believe that AMD has a lasting technological advantage compared to Intel. We believe that the driving force for the previous decline in AMD’s stock price has always been Yes, investors believe that Intel will be able to solve the challenges facing manufacturing issues, which will reverse AMD’s success, but we hold the opposite view.” Caso said.
He further pointed out: “Now that Intel is committed to in-house manufacturing, we believe that Intel is unlikely to regain the advantage of transistors compared to AMD, and the current roadmap ensures that AMD/ will have an advantage until at least 2024. At the same time, we believe that Wall Street’s expectations for AMD’s server and game console businesses are too low. We predict that the company’s earnings per share will reach $2.81 in 2022, which is 12% higher than the average Wall Street analyst’s estimate. ; Under optimistic assumptions, it is expected that its earnings per share will reach about US$3.00.”
article links：It is recommended to buy AMD and Nvidia, avoid Intel
Reprint indicated source：Shine Trader Limited Live information