Advanced Micro Devices, Inc. (NYSE: AMD) has had its ups and downs, particularly in the revenue scene. Even though there were a few setbacks after the technology company announced their latest earnings report, a number of investors are actually bullish on the AMD stock. After the declaration that they have entered an agreement for loan and security, it seems like there will be more good news for the investors and the company itself.
If you are still bearish on this stock, here are three big reasons why you may want to change your mind:
New Line of Credit and Better Share Performance
As mentioned, Advanced Micro Devices has stated that they have obtained an agreement for loan and security. The principal amount being talked about here is $500 million. A group of lenders along with the Bank of America (NYSE:BAC) is in the contract where the US-based CPU and GPU manufacturer gets cash and cash equivalents plus marketable securities. This may be worth roughly $1.2 billion, which the company expects to get by the end of the fourth quarter while staying committed to preserving ongoing balances of around $1.1 billion.
Experts agree that this secured revolving line of credit will help boost the company in terms of its financial flexibility. This may be used to the development and continued transformation of the Advanced Micro Devices products and solutions. As for the share performance of the company, Advanced Micro Devices is actually doing great. Over the past five years, it was up 12%. Last year, AMD increased almost 75% in share performance, while this year it is 47.5% higher.
Advanced Micro Devices has recently made headlines when it bundled Battlefield 4, a well-known first person shooting game from DICE, for free with any R9 series graphics card purchase. Just last week, a conference was held known as the APU13 Developer Conference where a number of planned products were unveiled. These included a tablet without the need for a fan, ultrathin notebooks, and 2 in 1s. They also support InstantGo from Microsoft, which will allow the devices to wake faster and ensure data refresh actively even on standby.
Sales have surged since the launch of the new graphics card series R9. The increase is said to be at least 3% up to 5% even though the competition is tough against NVIDIA (NASDAQ:NVDA). This growth will only intensify especially now that the company has changed its focus and is currently concentrating on a certain group: the gamers. In fact, AMD's processors will be available in the upcoming video game consoles from Microsoft (NASDAQ:MSFT) and Sony Corp (NYSE:SNE). This is good news for the investors because Advanced Micro Devices Stock has the chance to regain some of its lost market share from its rivals, Intel (NASDAQ:INTC) and NVIDIA.
Advanced Micro Devices's Advantage
Probably the biggest advantage of Advanced Micro Devices Stock is the fact that it is the only one (aside from Intel) that can legally produce X86-compatible infrastructure. This is important especially since Windows RT has recently abandoned OEM. In this case, Advanced Micro Devices (and Intel) will be the only one that can successfully be used in the Windows space. Aside from that, Advanced Micro Devices Stock has already proven its expertise when it comes to graphics and gaming. This will help the company target OEM structures that have their focus on gaming.
Although Intel wins over AMD a few times, Advanced Micro Devices is still successful in the low-end notebook world. The prices significantly undercut Intel's products; so in essence, Advanced Micro Devices does have huge hope for the future. What's more, Advanced Micro Devices even scored the Samsung Ativ Book 9 Plus. However, the most useful for the company right now is its semi-custom business where the products can be reused for several other purposes. An example of which are the Jaguar cores. They did not do well in tablets, but they are now very much welcomed in the PlayStation 4 and the Xbox One.
With many choices of chip stocks these days, you can bet that Advanced Micro Devices is a good buy. This is especially beneficial for you if you are aiming to receive long-term profits.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.