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A Basic Overview: Advanced Micro Devices Inc. (AMD) Stock

Advanced Micro Devices Inc. (NASDAQ: AMD) is a processor company that supplies chips directly to popular gaming consoles. This market is beginning to recover after two years of supply issues.

At the same time, AMD contributes critical components to two competing gaming console ecosystems: the Sony PlayStation 5 and the Microsoft Xbox Series X and S. All of these consoles include AMD CPUs and GPUs. As a result, AMD benefits from the evolution of console video games as a whole, rather than from the episodic success of one firm in particular.

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During the COVID-19 crisis, the current Sony and Microsoft consoles were released near the end of 2020 and quickly became the best-selling consoles in history. However, a scarcity of chips resulted from a 17 percent increase in demand for semiconductors from 2019 to 2021, as well as the shutdown of numerous businesses at the same time. The issue has also hampered the availability of new game consoles, preventing many gamers from upgrading their gaming equipment.

Sony management revealed their aim to considerably boost the manufacture of PlayStation 5 systems from the beginning of June 2022. Microsoft also plans to enhance Xbox manufacturing and has already paid for priority chip fabrication in a few facilities.

AMD does not have a dedicated category for income from the supply of CPUs for set-top boxes. However, the enterprise, embedded, and bespoke devices category accounted for $2.5 billion of the company’s total sales of $5.9 billion in the first quarter of 2022.

The remaining funds come from computer and graphics processors. Despite the disparity in sales, the corporate segment’s operating income is larger. This might be attributed to an increase in gaming console demand.

Furthermore, Sony and Microsoft anticipate the arrival of new, more powerful gaming consoles in the near future. For AMD, this means more sales of higher-priced top-end CPUs.

AMD stock rose 3.36% this week, for a monthly gain of 10.43 percent. It had a quarterly price performance of -0.24%, and a trailing twelve-month price performance of 30.15 percent.

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