This Chipmaker Will Be One of the Leaders in the Next Market Move Higher

The stock market’s recent decline has been felt most heavily in technology stocks. That’s the typical case of selloffs in general, as tech stocks tend to outperform the market on the way up.

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  • Investors who buy industry-leading tech names during a market correction can typically improve their returns as the market inevitably rebounds. While it may be too soon to say if the current bottom is in, we’re likely closer to the bottom than not.

    That makes it the perfect time to target great tech names. One such name is Advanced Micro Devices (AMD).

    The chipmaker has been a beneficiary of the recent boom in demand for personal computers amid the rise of hybrid and remote work. That long-term trend will likely continue, even if some analysts are prematurely worried about it ending.

    Shares are now more than 25 percent off their all-time highs, making them a prime target for a rebound, especially as earnings are up 137 percent in the past year and revenue is up 54 percent amid a tough economy.

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  • Action to take: Investors may want to start buying shares at today’s prices, and potentially look to add more shares on any further drop. The company has been a top performer operationally and in stock performance in the past few years. Shares don’t pay a dividend, but buying on a big enough dip will be rewarding enough in time.

    For traders, the July $140 calls last went for about $10.30, an indication of how traders are already starting to eye a move higher in the coming months. Such a move can likely turn this option into a mid-to-high double-digit winner.

     

    Disclosure: The author of this article has a position in the company mentioned here, and may further trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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