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Advanced Micro Devices (NASDAQ: AMD) It has become one of the most notable comeback stories in recent years. The company went from being neglected in the middle of the past decade to becoming a leader in CPUs, GPUs, and embedded chips under the leadership of CEO Lisa Su.
Advances in AI will put AMD stock on an upward trajectory, rising 127% in 2023. But we’ll have to watch closely to determine whether semiconductor stocks can make billionaires out of this.
Current status of AMD
AMD’s stock has benefited from an incredible level of success under Su and has the potential to rise further. When Su took over in her 2014, she limited the company’s focus to her CPUs and her GPUs. It took time for Hsu’s vision to come to fruition, as the semiconductor industry’s product development schedule takes her at least three years.
Nevertheless, at the time, the company’s CPUs outperformed those of its long-time rivals. intel. Obtained a contract with a power company in the GPU field SonyPlayStation and microsoftXbox. Furthermore, the GPU Nvidia In some cases, the company’s data center technology helped it take market share from Intel.
Additionally, just when it looked like Nvidia would dominate AI chips, AMD released its Instinct MI300A accelerator chip and MI300X GPU. AMD claims this is a faster chip than his Nvidia’s H100.
These new products boosted investor optimism, sending semiconductor stocks to a 52-week high in late December. AMD stock more than doubled last year.
Here’s why it’s hard to mint a millionaire
Unfortunately, turning small investors into millionaires requires a level of growth that is beyond most people’s imagination. AMD’s recovery has pushed its market capitalization to nearly $220 billion, cementing its status as a mega-cap stock.
If an investor bought $10,000 worth of AMD stock today, the market cap would have to be closer to $22. Trillion For that position to be worth $1 million. Currently, the stocks with the highest market capitalization are: applehas a market capitalization of approximately $3 trillion, less than one-seventh of that amount.
Also, AMD’s financials will need to improve significantly to get the stock into hyperdrive. Revenue for the third quarter of 2023 was $5.8 billion, an increase of 4% year-on-year. In comparison, his first three quarters of 2023 revenue fell 9% annually.
AMD’s revenue growth should improve. Still, even if you find a way to match Nvidia’s 206% revenue increase in the third quarter of fiscal 2023 (ending Oct. 29), recent investors with only a few thousand dollars invested will become millionaires. I don’t think that will happen.
Billionaire status is more accessible to large investors who bought shares in Suh on October 8, 2014, when he became AMD’s CEO. If you had started a $10,000 position back then, that position would now be worth about $414,000. That means if the stock rises another 127% in his 2024, these investors’ original investment would be close to his $1 million.
AMD as a billionaire manufacturer
AMD could probably help investors make money on the road to millionaires, but it’s probably too big for smaller investors to accomplish that feat on their own. As a large-cap stock, it’s unlikely to achieve the 100-plus increase needed to go from $10,000 to $1 million.
Nevertheless, AMD’s performance has far outpaced the index’s performance during Su’s time at the company. Given past successes, this trend is likely to continue. So even if you don’t become a billionaire, investing in AMD stock for the long term can make you significantly richer.
Should you invest $1,000 in Advanced Micro Devices right now?
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Will Healy holds positions at Advanced Micro Devices and Intel. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Microsoft, and Nvidia. The Motley Fool recommends Intel and recommends the following options: Long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
Can AMD stock help you become a billionaire? Originally published by The Motley Fool
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