This is Advanced Micro Devices, Inc. (NASDAQ:AMD) Is at All-Time Highs amid Mountain Bike Ambitions

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Advanced Micro Devices, Inc. (NASDAQ:AMD) solid growth prospects underscore why the stock is trading at all-time highs. The stock is up by more than 60% for the year, in what is turning out to be a break out year for the chipmaker. The blockbuster move comes on the company reporting solid financial results and providing guidance that affirms underlying growth heading into year-end.

AMD Outlook

The unveiling of new chipsets to cater to the burgeoning gaming industry is another development that is strengthening AMD sentiments in the market. The fact that the company is eating into Intel Corporation market share in the server business has also gone well with investors fueling the recent bull run. Likewise, the chipmaker has also moved to diversify its business empire with the unveiling of mountain bikes as it continues to explore new growth opportunities.

Conversely, it does not come as a surprise that the stock is trading in a steep uptrend. Pullbacks have so far acted as critical support levels from where bulls have come in and continued to push the stock higher.

While the stock has pulled lower from record highs, the pullback presents an exciting opportunity for investors who missed out on the initial leg higher, given the solid underlying fundamentals supporting the stock.

About AMD

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AMD is a semiconductor company that operates under two segments of computing and Graphics. The company produces microprocessors, chipsets, and graphics processing units in addition to a semi-custom System on Chip products. It serves original equipment and design manufacturers as well as data centers and system integrators.

Why is AMD Up 60% For the Year?

Server Business Growth

A strong second-quarter earnings report is one of the reasons why AMD has rallied to record highs and continues to elicit bids among investors. Amid a challenging business environment, the chipmaker was still able to post a 26% year-over-year increase in revenue attributed to strong notebook and server processor sales. Gross margin also improved significantly, helping boost the company's earnings to $0.18 a share up from $0.08 a share reported a year earlier.

Likewise, AMD has grown to become a force to reckon with in the server processor business. The company has already achieved a double-digit server processor market share, with the segment now accounting for more than 20% of the company's total revenues.

The fact that AMD has continued to grow its server processor market share at Intel's expense is one of the reasons why the stock continues to enjoy renewed investor interest in the market. The company is on course to take its market share in the segment to more than 30% as Intel continues to stumble on its transition from a 10-nanometer to seven-nanometer chips.

Video Gaming Opportunity

In addition to becoming a key supplier for chips for the servers, AMD has also become a key supplier of GPU to the gaming industry. The company has gained an obvious edge in the gaming console market, conversely becoming Sony Corp and Microsoft Corporation preferred supplier of GPU for consoles.

The unveiling of the Radeon RX 5300 GPU is poised to strengthen the company's competitive edge in the video gaming industry, given the additional capabilities on offer. The graphic card is poised to support AAA, eSports, and virtual reality areas that continue to offer tremendous opportunities for growth.

In addition to strong server and GPU businesses, AMD has also moved to strengthen its hardware business with the unveiling of mountain bikes. The company is currently offering two models, the AMD Customer Cruiser and AMD Custom Mountain Bike.

While it is still unclear whether the company plans to launch the mountain bikes on a global scale, it is clear the company's research teams are working round the clock to safeguard the company future and growth metrics.

Impressive Q3 Guidance

Impressive third-quarter guidance also continues to affirm the fact that the chipmaker is in a phase of robust growth as it continues to shrug off competition in the industry. AMD expects its third-quarter revenue to increase 42% year-over-year and 32% sequentially. Full-year revenue should be up 32% attributed to strong sales on PC gaming and data center products.

Bottom line

AMD's strong performance in 2020 does not come as a surprise. The chipmaker is firing on all cylinders as it continues to take the fight to the old-guards in the semiconductor industry. Double-digit growth in the server business underscores strong demand from AMD products. A growing portfolio of GPUs, on the other hand, affirm AMD solid growth metrics in the burgeoning gaming industry, an area the company is poised to generate significant value going forward.

A strong second-quarter report followed by an impressive Q3 guidance affirms the company's growth metrics and long term prospects. Likewise, the stock looks set to continue its solid performance, given the solid underlying fundamentals that excite the markets.

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