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Bank of America’s Favorite Semiconductor Stocks

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Part 4
Bank of America’s Favorite Semiconductor Stocks PART 4 OF 5

Bank of America’s Positive View of Advanced Micro Devices

Bank of America on Advanced Micro Devices

Bank of America Merrill Lynch (BAC) has shared its positive view on Advanced Micro Devices (AMD). The investment firm believes AMD has the potential to provide a strong return in the near future.

Bank of America’s Positive View of Advanced Micro Devices

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A BAC research team wrote, “AMD is at the cusp of launching several new products in 2017 which we believe can help expand its operating margins well above Street expectations.” The company provides semiconductor products such as chipsets, APUs (accelerated processing units), servers, and embedded processors. The company is adding new products in 2017, which could be an advantage for the company.

BAC believes that some fundamental factors such as changes in demographics and improvement in consumer demand will boost the demand for semiconductor products (SPY) (QQQ). It also expects people to be even more dependent on technology in the near future, which could help semiconductor stocks.

AMD’s performance

On a year-to-date basis, Advanced Micro Devices has risen 20.8% as of October 10, 2017. Over the past year, the stock has risen nearly 100%. The broader market S&P 500 index (SPY) has risen 19.5% over the same period. AMD stock is currently trading at a negative PE (price-to-earnings) multiple. The company’s earnings growth hasn’t been very impressive in the past few quarters.

But BAC still expects AMD’s earnings growth to accelerate in the near future and has set a current target price of $18.

In the next part of this series, we’ll look at the performance of Skyworks Solutions (SWKS).

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