Advanced Micro Devices Stock Has Jumped More Than 5x Since Late 2018: Here’s Why

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Advanced Micro Devices

Advanced Micro Devices Inc. (NASDAQ: AMD) stock price rose more than 5.5x from $18 in 2018 end to around $102 currently, primarily due to favorable changes in its sales and P/S multiple. During this period, the company witnessed a stellar 192% rise in revenues, and combined with a higher P/S multiple, the company’s stock price has rallied despite a rise in the outstanding share count. Further, over the same period, the S&P 500 returned around 65%, meaning that AMD stock managed to substantially outperform the index since 2018-end.

In our interactive dashboard, Why Advanced Micro Devices Stock Moved: AMD Stock Has Gained 455% Since 2018, we break down the factors behind this move.

(A) AMD’s Total Revenue has grown 192% from $6.5 billion in FY 2018 to $18.9 billion on an LTM basis

  • AMD’s total revenue has risen consistently from $6.5 billion in FY ’18 to $16.4 billion in FY ’21, and currently stands higher at $18.9 billion on an LTM basis.
  • AMD is an American multinational semiconductor company, that develops computer processors and related technologies for business and consumer markets.
  • AMD’s largest segment is the computing and graphics segment, bringing in $9.33 billion as of FY ’21, making up around 57% of the company’s total sales.
  • For additional details about AMD’s revenues and comparison to peers, see Advanced Micro Devices (AMD) Revenue Comparison
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(B) Revenue per share (RPS) increased 106% from $6.53 in 2018 to $13.45 currently

  • AMD’s revenue rose from $6.5 billion in 2018 to $18.9 billion currently, while the outstanding share count rose from 1 billion in 2018 to around 1.4 million currently.
  • Due to this, RPS has jumped from $6.53 in FY ’18 to $13.45 currently.

(C) Price-To-Sales (P/S) multiple for AMD rose strongly from 4.6x in 2018 to 15.2x by 2020 end, but has pulled back to 7.6x currently, still around 1.65x higher than its 2018 level

  • AMD’s P/S multiple rose strongly to around 15.2x by late 2020, on the back of rising investor expectations surrounding increased semiconductor sales.
  • However, due to the current geopolitical tensions and increased economic uncertainty weighing on the broader markets, the P/S multiple has pulled back, currently standing at around 7.6x.
  • For additional details about the company stock returns and comparison to peers, see Advanced Micro Devices (AMD) Stock Return Comparison.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns May 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 AMD Return 13% -33% 750%
 S&P 500 Return -5% -18% 76%
 Trefis Multi-Strategy Portfolio -7% -23% 204%

[1] Month-to-date and year-to-date as of 5/18/2022
[2] Cumulative total returns since the end of 2016

 

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