All investors know by now the stocks that are performing well during these crazy times. We all know about the DAWN companies and others in their respective fields, but what about industries that are quietly surviving and even thriving? We present two stocks from the semiconductor and data storage sectors that might just surprise stockholders this year.
Advanced Micro Devices, Inc. (NASDAQ: AMD) was the S&P 500’s (NYSEARCA: VOO) top performer in 2018 and 2019, surging 80% and 152% respectively. AMD had been considered second-best to Intel (NASDAQ: INTC) until recently, when it released its 7 nanometer-based Ryzen 3000 desktop CPUs, a better priced and better-performing chip than Intel’s 10 nanometer chips (the lower the number, the better). Intel isn’t expected to release 7 nanometer chips until 2021, and as a result, AMD’s market share has steadily risen to 34% from 23% at the beginning of last year, a 48% increase.
Additionally, AMD has set its sights on NVIDIA (NASDAQ: NVDA) with more powerful and less expensive GPUs, boosting its market share to 31% in Q4 of 2019, a 65% increase from the year prior of 18.8%. AMD’s revenue has had a few snags and it bottomed out in 2015 at $3.99 billion, due to lower PC sales, only to recover and rise 68.67% to $6.73 billion in 2019, its highest yet. As of May 8, the company’s stock price is up 8.29% from the beginning of the year and CEO Dr. Lisa Su forecasts a long-term compound annual growth rate of 20%.
AMD stands to benefit during the pandemic by providing chips for three important sectors — data centers, laptops, and video games — as people are forced to stay at home. In fact, analysts are predicting a 58% surge in computing and graphic chip sales in Q1 of 2020. AMD also has an exclusive contract with both Sony (NYSE: SNE) and Microsoft (NASDAQ: MSFT) to supply them with chips for their new gaming consoles due out before the holiday season this year. Finally, while Intel continues to play catch-up, AMD will be releasing its 5nm-based Zen 4 chips in 2022 helping it gobble up more market share as a result.
2. Pure Storage
Pure Storage (NYSE: PSTG) was able to brace for the COVID-19 pandemic after receiving early word in January of supply chain disruptions from the Far East and took steps to ensure that their production would remain unaffected. Since going public in 2015, the company has grown revenues 844% and beat estimates in their last quarterly report by $3.6 million and also added a record 500 new customers. The company specializes in solid state flash drives and cloud data infrastructure and saw a strong demand for their services in Taiwan amid the outbreak.
There, Pure Storage partnered with Chang Gung Memorial Hospital to provide it with its robust cloud switching services, which enables a client to seamlessly switch between public and private clouds with help from Amazon (NASDAQ: AMZN) Web Services. Moreover, with nearly 70 million Americans telecommuting, the company has seen a surge in demand for its virtual desktop infrastructure services, which can be utilized for things beyond telecommuting like accessing workstations with mobile devices, decreased IT costs and bandwidth.
Like most companies in Silicon Valley, Pure Storage had layoffs in response to the pandemic, losing about 3% of staff or 100 employees in total. The company has been named a leader in Gartner’s Magic Quadrant for six consecutive years for primary storage and solid-state arrays and is joining 25 companies in Silicon Valley to raise $22 million for the Silicon Valley Community Foundation and the CDC. Pure Storage invests nearly 18% of its revenue in research and development and its new FlashArray//C product for high-capacity workloads places the company in a position to gain more market share. The company has nearly $710 million in net cash and its stock is down nearly 13% since the start of year as of May 8, 2020.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in stocks mentioned above. Read our full disclosure policy here.
Contributing Writer at MyWallSt
David fell in love with the stock market in 2000 after making $30,000 overnight on Techniclone. His favorite stocks today are Netflix, Google, Amazon, and Apple as they are the market leaders in their sectors and are safe long-term investments.