The semiconductor business has proliferated in recent years thanks to rising demand from data centers, PCs, smartphones, factories, and cars.
IDC says the semiconductor business made $582 billion in 2017. Revenue is predicted to rise 13.7% to $661 billion in 2022. Wall Street worries about the semiconductor industry after bad Nvidia and Micron Technology results.
One semiconductor stock, Advanced Micro Devices (NASDAQ:AMD), may continue to do well even if the market has declined. Let’s see why.
Despite challenges, AMD is growing.
Advanced Micro Devices (NASDAQ:AMD) stunned Wall Street with a 70% year-over-year revenue increase to $6.6 billion in its second quarter report on Aug. 2. The chipmaker’s growth was helped by the data center market, although PC chip sales also grew strongly.
Last quarter, AMD’s client sector revenue climbed 25% year over year to $2.2 billion. This is impressive, considering Q2 PC shipments dropped 15.3%. AMD’s gains in desktop and laptop CPUs drove client growth.
According to Mercury Research, Advanced Micro Devices (NASDAQ:AMD) had a 20.6% share of the desktop processor market at the end of Q2. Its notebook processor market share was 24.8% last quarter, up 4.8 percentage points year-over-year. AMD’s technology lead over Intel (INTC -0.63%) helped it improve chip sales last quarter.
ASP of AMD’s client processors grew year over year, bringing the operating margin to 32%. AMD’s client processor business could improve despite the PC slump. AMD’s Ryzen chips will power 300 laptops this year.
Advanced Micro Devices (NASDAQ:AMD) will ship 5-nanometer Ryzen processors this quarter. These new CPUs should help AMD capture market share from Intel, whose Raptor Lake processors will use a 10nm technology.
The smaller die size of AMD’s future processors means they’ll be more powerful and efficient. AMD’s current Ryzen processors are built on a 7nm process, which could lead to better client sales.
Data centers are booming.
AMD’s Q2 data center revenue grew 83% to $1.5 billion. Last quarter, cloud and enterprise clients drove record sales of EPYC server processors.
Advanced Micro Devices (NASDAQ:AMD) held 13.9% of the server CPU market in the second quarter, up 4.4 percentage points year-over-year. AMD’s next-generation Genoa server processors will ship in 2022. Leaked benchmarks suggest that 5nm chips could steamroll Intel.
Advanced Micro Devices (NASDAQ:AMD) is ready to corner a larger share of the server CPU market, which could propel its growth as it anticipates a $42 billion sales opportunity in this category. With growth drivers like console gaming, it’s simple to see why AMD can defy semiconductor industry difficulties.
AMD’s market share gains and secular growth potential make it a top semiconductor company to purchase right now, especially at 22 times forward earnings compared to a five-year average of 42.
Featured Image : Megapixl © Garrett1984
Author Shariq Khan 
