Advanced Micro Devices, Inc. (NASDAQ:AMD) stock has traded at a price suggestive of a $10 billion valuation twice in the firm’s history. The company has introduced a new CPU architecture/ processor on both occasions. Analysts find firm’s valuation to be appropriate heading into the release of Zen and consider its stock to outperform the semiconductor market in 2017. Protective put options bought around fiscal 3Q2017 can permit for realizing company’s future growth potential while making profits.
2016 is over and Advanced Micro market cap has risen to over $10 billion from $2.178 billion, a 377% jump over the past year. The stock has traded at this mark on two other occasions before, in 2000 and 2007. The increase in market cap in both occasions was recorded with the launch of a competitive architecture/ CPU processor.
Advanced Micro in this year is beginning to look significantly like its most successful periods back in 2000 and 2007.
In 1999 Advanced Micro released their K7 Athlon processor. This launch was a success and fared well as compared to Intel’s offerings. The company’s Athlon processor brought stock to a peak valuation of $14.32 billion in 2000 from a valuation of $2.82 billion in 1999. But Athlon was the sole catalyst for the growth of over 400% in market cap in this period.
What is more interesting about Advanced Micro at the time, however, was it recorded no appreciation in its market cap prior to Athlon’s launch. It was not until September 1999 that the stock’s up move had commenced. In the imminent quarters the company posted increasing EPS until its eventual decline in July 2000. It showed a period of almost 9 months which immensely rewarded company’s shareholders.
In May 2005 Advanced Micro released K9 Athlon 64×2 dual-core processor. This launch was even accompanied with Turion mobile know-how for notebook PC’s. The company was more competitive this time around and in certain respects ahead of Intel’s offerings.