What Should Investors Expect From Advanced Micro Devices Stock in 2020?

2019 has been a great year for AMD stock, but will its momentum continue into 2020?

By all accounts, Advanced Micro Devices (NASDAQ:AMD) hit it out of the park in 2019. Advanced Micro Devices stock is currently up 115% over the last 12 months. 

And many analysts believe that AMD stock price can climb a lot more. AMD continues to hold its own against bigger companies like Intel (NASDAQ:INTC) and Nvidia (NASDAQ:NVDA). 

Moreover, AMD’s CEO, Lisa Su, has stated that the company will release even more impactful  products in 2020. Let’s look at a few reasons why AMD stock price may rise a great deal more in 2020.

Things to Like About Advanced Micro Devices Stock

Here are three reasons to be optimistic about AMD stock’s 2020 outlook.

1. The Sales of AMD’s Semi-Custom Chips Should Pick Up

During the third quarter, AMD’s revenue took a hit, mostly due to lower  sales of its semi-custom chips which are used in gaming consoles.

The decline occurred because both Microsoft (NASDAQ:MSFT) and Sony (NYSE:SNE) are getting ready to release their next-generation gaming consoles. As a result, both companies are not building many of their current consoles now, and their demand for AMD’s chips used in those consoles has dropped. But the sales of AMD’s semi-custom chips should pick back up once the next-gen consoles are released. 

2. Lisa Su Continues to Turn AMD Stock Around 

Another reason to be bullish about Advanced Micro Devices stock is the company’s CEO, Lisa Su. October marked Su’s fifth year as CEO of Advanced Micro Devices, and a lot has happened during that time. 

When she took over, AMD stock price was hovering around $2.66. Today the stock is near an all-time high. 

Su was able to bring the company back from bankruptcy, restructure it, and help it become profitable again. She did that by consistently delivering competitive products to the market quickly.

3. AMD Is Taking Market Share From Other Companies

Investors are so excited about Advanced Micro Devices stock partly because the company continues to take market share from Intel. In the central processing unit (CPU) market, AMD  has an estimated market share of 18%, five percentage points above its level of a year ago.

Of course, Intel still has a big lead on AMD in the CPU market. But now that AMD’s CPU sales are steadily growing, it should be able to continue to raise its market share in 2020.

The Bottom Line on Advanced Micro Devices Stock

Advanced Micro Devices has faced plenty of challenges over the past couple of years. First, the company experienced the cryptocurrency bust, and then the semiconductor market slowed considerably due to the ongoing trade war. 

But the company’s revenue and earnings are still improving, and it continues to take market share from its competitors. All in all,  AMD clearly looks well-positioned to keep moving forward in 2020. 

As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities.