At some point, you’ve got to think that there’s a contrarian case waiting for Intel (NASDAQ:INTC). Regrettably, I don’t know when that is and certainly, the signs don’t look too hot. However, the opposite is true for Advanced Micro Devices (NASDAQ:AMD). Long the poor man’s Intel, a quick look at AMD stock reveals that this is no longer the case.
Frighteningly for some folks, Intel may be considered the poor man’s AMD one day. Perhaps then, INTC will start making contrarian gains against AMD stock. For now, and for the foreseeable future, Intel must figure out what it’s going to do. As you’ve heard, the company’s move to 7-nanometer chips will be delayed again, necessitating previously unthinkable changes at Intel.
To be fair, this isn’t the first time that the iconic chipmaker courted trouble. Back in 1995, Intel blundered on its Pentium P5 chip. To turn lemons into lemonade, the company inscribed a quote from former Intel CEO Andy Grove onto keychains made from those pesky P5s. The inscription stated:
Bad companies are destroyed by crises; good companies survive them; great companies are improved by them.
Can management make Intel great again? Or will it be locked up into the prison of irrelevancy? Over the long term, I don’t want to count INTC out. Further, I’m encouraged that Intel hasn’t breached technical support at around $44, a level that has held strong since late 2017.
But as you can guess, this is now Advanced Micro’s show. Whatever nearer-term credibility that Intel had, it’s now converting to positive sentiment toward AMD stock. Despite some already robustly positive sessions, here’s the scary part: AMD could go higher still.
AMD Stock Appeals to the New Generation of Tech Investors
Personally, I’m not too hot on buying into extreme momentum. I suspect many of you are in the same camp. Psychologically, an inherent sense of opportunity cost and the fear of holding the bag prevents like-minded people from hard-charging investments.
However, AMD stock could be different. That’s because the underlying company isn’t driven solely by momentum. Instead, as its second-quarter earnings report confirmed, substance backs up the enthusiasm. Though Advanced Micro presented a mixed bag report on paper, its revenue beat and better-than-expected sales outlook for the year – especially under extraordinarily difficult times – skyrocketed shares.
Just as importantly, if not more so, AMD stock will likely appeal to a new generation of technology investors. Blessed with an abundance of growth channels, one that gave AMD a sizable boost a few years back was cryptocurrencies. And this market is now turning red-hot, which a certain John McAfee would find very relieving.
Here’s my thinking. If cryptocurrencies continue rising, then this bodes well for AMD’s crypto-mining processors. Further, I genuinely believe that the “blockchain markets” have very long legs.
In an email sent to me regarding the recent phenomenon of “newbie” investors, Amy Lynch, founder and president of FrontLine Compliance, stated: “Younger traders with little money to invest and trade are the ones participating in “stock slices” or buying low priced technology or healthcare stocks hoping that they can make small gains on increased market volatility – essentially day trading.”
Additionally, “Easy to use online trading platforms like Robinhood and other discount brokers make it quite simple to open accounts, trade on margin, and trade options.”
I think it’s the easy access that young investors love. And there’s no more accessible investment in my opinion than cryptocurrencies.
Don’t Be Surprised If Advanced Micro Advances Again
For years, I’ve supported the case for long-term crypto profitability. Part of my argument was that cryptos trade 24/7, 365 days a year. That’s just not something that you can do on Wall Street.
Plus, the virtual currency market inherently offers one of the popular draws for Robinhood – fractional ownership. Therefore, no one is technically “priced out” of this sector. This is true investing egalitarianism.
Of course, young people are savvy to all this. As well, Lynch points out that “With the current pandemic environment, we now have more people either at home not working or working from home with more time to focus on their personal trading accounts.”
Eventually, and perhaps very soon, sentiment will shift toward cryptocurrencies. Invariably, this will spark interest in crypto mining. And suddenly, AMD stock doesn’t seem like a momentum play that will run out of steam.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. As of this writing, he did not hold a position in any of the aforementioned securities.