Advanced Micro Devices (NYSE: AMD) is a small cap semiconductor stock that has existed long before most people ever thought of owning some type of computer device. In fact, Advanced Micro Devices was founded in 1969 – the year we landed on the moon. However, Advanced Micro Devices along with its shareholders have not had an easy time lately as the stock is down 63.6% over the past year, down 58.1% over the past five years and down 47.1% over the past ten years:
However, there can be a silver lining behind every dark cloud or troubled stock. With that in mind, here is a quick summary of the good news Advanced Micro Devices has for investors:
- Restructuring Could Stop the Bleeding on the Cost Side. There is no denying that Advanced Micro Devices’ financials and its earnings reports in recent years have been rather ugly. However, Advanced Micro Devices announced back in October that it would accelerate strategic initiatives to restructure the company and implement a lower cost business model with the efforts designed to simplify the product development cycles, reduce breakeven points and enable the funding of differentiated product roadmaps and strategic breakaway opportunities.
- The Latest Earnings Report Beat Low Expectations. While Advanced Micro Devices' most recent earnings report showed that earnings, revenues and operating income all fell year over year and sequentially, Wall Street was expecting a worst performance from Advanced Micro Devices – specifically a loss of $0.21 a share instead of the loss of $0.14 it posted.
- Customers Want an Alternative to Intel. Healthy competition tends to always be better than monopolies or a near equivalent of one. In the case of computer chips, customers will inevitably want an alternative to having prices dictated to them by Intel Corporation (NASDAQ: INTC) – meaning there will always be customers willing to throw some business to Advanced Micro Devices. In fact, Advanced Micro Devices has long accused Intel of illegal tactics in the market for microprocessor chips to the point where its former CEO has even written a book to remind people of what they did.
- New Turbo Dock Technology. Advanced Micro Devices is hoping to take on Intel's ultrabooks with its new keyboard docking technology that will modify the level of performance of thin-and-light hybrid devices when used in tablet or laptop modes. Apparently, Advanced Micro Devices’ new Turbo Dock will crank up performance by up to 40% when the tablet and dock are connected and will allow users to have a hybrid with both laptop or tablet performance but without sacrificing either battery life or performance.
- PlayStation 4 May Use AMD Chips. Sony is set to unveil its first new PlayStation console in seven years and sources have told the Wall Street Journal that they have shifted to using Advanced Micro Devices chips. There are also other rumors that the AMD processor will be 8 core and run at 1.6GHz. Should the rumors prove to be true, the PlayStation 4 could go a long way towards shoring up Advanced Micro Devices.
Of course, the computer, chip and semiconductor industries still face considerable changes and/or threats – meaning an investment in small cap Advanced Micro Devices is not a good idea for conservative risk adverse investors. Nevertheless, the news for investors is not all bad as Advanced Micro Devices could still end up being the ultimate turn around story.
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