What’s Driven A 5x Rise In Advanced Micro Devices Stock Since 2018?

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AMD: Advanced Micro Devices logo
AMD
Advanced Micro Devices

Advanced Micro Devices Inc. (NASDAQ: AMD) stock price rose almost 5x from $18 in 2018 end to around $86 currently, primarily due to favorable changes in its sales and P/S multiple. During this period, the company witnessed a stellar 233% rise in revenues, and combined with a higher P/S multiple, the company’s stock price has rallied despite a 61% rise in the outstanding share count. Further, over the same period, the S&P 500 returned around 60%, 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 364% Since 2018, we break down the factors behind this move.

(A) AMD’s Total Revenue has grown 233% from $6.5 billion in FY 2018 to $21.6 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 even higher at $21.6 billion on an LTM basis.
  • AMD is an American semiconductor company, that develops computer processors and related technologies for business and consumer markets worldwide.
  • AMD’s largest segment is the computing and graphics segment, which brought in $9.33 billion as of FY ’21, making up around 57% of the company’s total sales.
  • For details about AMD’s operating income and comparison to peers, see Advanced Micro Devices (AMD) Operating Income Comparison
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(B) Revenue per share (RPS) increased 107% from $6.53 in 2018 to $13.52 currently

  • AMD’s revenue rose from $6.5 billion in 2018 to $21.6 billion currently, while the outstanding share count rose from 1 billion in 2018 to around 1.6 million currently.
  • Due to this, RPS has jumped from $6.53 in FY ’18 to $13.52 currently.

(C) Price-To-Sales (P/S) multiple for AMD rose strongly from 4.6x in 2018 to 15.4x by 2020 end, but has pulled back to 6.3x currently, still almost 1.4x higher than its 2018 level

  • AMD’s P/S multiple rose strongly to around 15.4x 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 6.3x.
  • For additional details about the company stock returns and comparison to peers, see Advanced Micro Devices (AMD) Stock Return Comparison.

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Returns Aug 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 AMD Return -6% -39% 680%
 S&P 500 Return -2% -15% 80%
 Trefis Multi-Strategy Portfolio -3% -16% 235%

[1] Month-to-date and year-to-date as of 8/30/2022
[2] Cumulative total returns since the end of 2016

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