Nvidia may take the top spot when it comes to the largest semiconductor companies based on market cap size, but Advanced Micro Devices (AMD) is still a name to watch. When taking into account the growing size of the semiconductor industry, there’s plenty of market share to go around for its largest companies.
As Zacks mentioned, one of the revenue drivers for AMD is demand for its Ryzen processors. Its usage in gaming and commercial PCs will keep consumers interested, allowing the company to expand its gross margin. Gross margin expansion can help contribute to greater profitability.
One can’t get away from mentioning semiconductors without also referencing artificial intelligence (AI). It’s a mutually beneficial relationship, as AI can’t run without the processing power of semiconductors. In turn, semiconductor demand these days is predicated on the growing usage of AI. One of the early trends that’s slated for expansive growth is sovereign AI. When countries are in need of full-scale AI infrastructures, that’s plenty of revenue potential. AMD is poised to compete in this burgeoning market space.
Famed money managers are also behind AMD. ARK Invest founder Cathie Wood is apparently invested heavily in AMD through her ARK ETF product offerings. If traders want to mimic the bullish bets of money managers, it helps to know where they’re allocating their capital.
Shiny Outlook for Semiconductors
Bullish AMD traders and investors may wish that the company existed in a vacuum. However, even when pitted against its peers, AMD still stands to benefit. That’s because the whole industry outlook appears bright.
Take research from Deloitte, for example. They’re predicting 2025 revenues could hit close to $700 billion, which indicates an all-time high. When stretching that time horizon out five more years, revenues could hit the $1 trillion mark.
Deloitte also noted that stock market performance is a key indicator for future success. Those industry players who are exposed to the AI trend stand to benefit the most. This is what makes AMD a prime play.
Trading Flexibility
Hate it or love it, there’s a trade for it. When it comes to AMD stock, traders can double down on their bullish intuitions or hedge their bets with an inverse trade. This gives traders the necessary flexibility to navigate volatile markets. After all, a runaway market can run roughshod over one’s trading capital, so it’s best to be ready for anything. Direxion leveraged and inverse funds allow for that flexibility.
When AMD exhibits upward price momentum, consider the Direxion Daily AMD Bull 2X Shares (AMUU), which generates 200% of the daily performance of AMD. When short-term pullbacks take place, investors can use the Direxion Daily AMD Bear 1X Shares (AMDD). Both funds allow for leverage and short plays without the use of a margin account. Traders can use the funds individually by taking one position or they can use a pairs trade to hedge against another.
For more news, information, and analysis, visit the Leveraged & Inverse Content Hub.
