So you‘re interested in investing in AMD? As the second-largest semiconductor company globally producing essential microchips for computers, data centers and gaming, AMD represents an intriguing opportunity.
This guide will explore multiple methods for gaining exposure to AMD stock along with an overview of AMD itself to assist with your investment decision-making process. Let‘s get started!
Who is AMD and Why Invest in Them?
Founded in 1969, Advanced Micro Devices specializes in developing computer processors and graphics chips for a wide variety of end-markets. AMD directly competes with industry titans Intel and Nvidia in several key segments:
- CPUs for PCs and laptops: AMD‘s Ryzen chips now power over 30% of Windows computers
- Data center servers: EPYC server CPUs capture over 25% market share
- GPUs for gaming/content creation: Radeon graphics lead discrete notebook GPUs
Additionally, AMD supplies components for prominent growth sectors like artificial intelligence, machine learning, augmented reality and the metaverse.
Here are some factors that make AMD stock compelling for investors:
- Benefitting from booming demand for semiconductors and high performance computing
- Steadily gaining market share against Intel and Nvidia over 5+ years
- Trading at reasonable valuation relative to long-term profit potential
- Exceptional management team led by CEO Dr. Lisa Su
As AMD leverages its chip technology across more segments, substantial revenue and earnings growth could support much higher stock prices.
Now let‘s examine how you can invest in this leading semiconductor player.
Direct Investment in AMD Stock
The most straightforward method for investing in AMD is purchasing shares directly on the stock market. This offers full exposure to AMD‘s future stock price performance.
Here is the play-by-play for investing in AMD stock yourself:
Step 1: Open a Brokerage Account
First, you‘ll need to open an investment account with an online brokerage like Fidelity or Charles Schwab. This allows you to access stock exchanges digitally to buy and sell shares.
When registering, you‘ll provide personal details and link a bank account to transfer money in and out. Opening an account takes less than 15 minutes in most cases.
Step 2: Fund Your Account
Next, fund your shiny new brokerage account so you have cash ready to invest. You can transfer any amount, say $100 or $5000, it‘s completely flexible. No need to invest your full portfolio at once.
Below are examples for potential starting investment amounts:
| Budget | AMD Shares* |
|---|---|
| $100 | 1-2 shares |
| $500 | 7-8 shares |
| $1,500 | 20-25 shares |
*Share amounts are estimates based on recent AMD stock prices around $65 per share
Step 3: Buy AMD Stock
Now the exciting part, it‘s time to become a part owner of AMD!
- Search for "AMD" on your brokerage platform to access the company‘s stock
- Enter the number of shares you want to purchase
- Preview transaction and place order
That‘s it – you‘ll receive confirmation of the executed trade and AMD shares will now appear in your account!
Investing in AMD Via Mutual Funds and ETFs
If purchasing direct AMD stock seems too risky, mutual funds and ETFs allow exposure to AMD along with built-in diversification.
These fund structures contain hundreds of individual stocks bundled together, managed by a professional portfolio manager. Some technology and semiconductor funds have invested billions of dollars combined into AMD stock.
Here are examples of popular options:
| Fund Name | Assets Under Management | AMD Holdings | Top 10 Holdings |
|---|---|---|---|
| Invesco QQQ Trust ETF (QQQ) | $170 billion | 23 million shares worth $1.5 billion | Apple, Microsoft, Amazon, Alphabet + more |
| Fidelity Select Semiconductors ETF (FSELX) | $5.7 billion | Over $475 million invested in AMD | Nvidia, Broadcom, Qualcomm + more |
Rather than own AMD shares directly, mutual fund/ETF shareholders own portions of these larger pooled funds containing the bundled stocks. This mitigates risk through diversification but reduces potential upside compared to direct AMD ownership.
Which Option is Right For You?
| Direct AMD Stock | Mutual Fund / ETF | |
|---|---|---|
| Risk vs. Reward | Highest risk, highest reward potential | Lower risk, lower reward potential |
| Ideal For | Very bullish on AMD specifically | Seeking diversification, less volatility |
| Investment Control | Choose exact AMD exposure amount | AMD is small % of many stocks in fund |
| Ease of Investing | Straightforward but requires some research | Simple due to professional management |
Parting Thoughts
I hope this guide empowers you when considering investing in AMD stocks, whether through direct shares or fund vehicles containing company exposure. Please conduct any additional due diligence before finalizing investment choices. Good luck! And if you have any other questions on AMD or semiconductors, don‘t hesitate to ask.
