Buy AMD – to play the next gen game consoles Ps5 and Xbox X

Buy AMD – to play the next gen game consoles Ps5 and Xbox X

• Next console cycle begins in end 2020 with Sony PS5 and Msft Xbox X.
• Console mkt expected to grow from 50B to 75B by 2025
• In previous cycles Microsoft and Sony relied on different suppliers, this cycle AMD takes it all.
• AMD offers the best CPUs and GPUs for gaming performances, and could become the reference for many years ahead
• AMD dollar revenue per console is expected to be a 75% step up from last year’s shipments for the PS4
• Valuation is not excessive: P/E to growth at 1x, P/Sales below 10x

Technically the uptrend is intact riding above a rising 40 week or 200 day moving average (orange line). It rose 7% yesterday breaching through a short-term bull flag formation, along with rising momentum and volume on the daily timeframe. The next test will be the all-time high around $59, on which the stock failed three times since February. A successful breach above $60, would pave the way to significant upside with $69 in sight over the short-term, then $80 to $100 over the medium term.

A move back below 49, would on the other hand annul the bull case.