Critical Review: Advanced Micro Devices (NASDAQ:AMD) vs. Rambus (NASDAQ:RMBS)

Advanced Micro Devices (NASDAQ:AMDGet Rating) and Rambus (NASDAQ:RMBSGet Rating) are both computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Advanced Micro Devices and Rambus, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Advanced Micro Devices 0 8 17 1 2.73
Rambus 0 1 5 0 2.83

Advanced Micro Devices currently has a consensus target price of $143.12, indicating a potential upside of 41.39%. Rambus has a consensus target price of $31.33, indicating a potential upside of 23.95%. Given Advanced Micro Devices’ higher probable upside, analysts plainly believe Advanced Micro Devices is more favorable than Rambus.

Earnings & Valuation

This table compares Advanced Micro Devices and Rambus’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Advanced Micro Devices $16.43 billion 9.98 $3.16 billion $2.69 37.63
Rambus $328.30 million 8.49 $18.33 million ($0.42) -60.19

Advanced Micro Devices has higher revenue and earnings than Rambus. Rambus is trading at a lower price-to-earnings ratio than Advanced Micro Devices, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Advanced Micro Devices and Rambus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Advanced Micro Devices 17.98% 20.66% 15.73%
Rambus -12.68% 17.27% 12.39%

Institutional & Insider Ownership

69.6% of Advanced Micro Devices shares are owned by institutional investors. Comparatively, 87.0% of Rambus shares are owned by institutional investors. 1.0% of Advanced Micro Devices shares are owned by insiders. Comparatively, 1.5% of Rambus shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Advanced Micro Devices has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500. Comparatively, Rambus has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500.

Summary

Advanced Micro Devices beats Rambus on 12 of the 15 factors compared between the two stocks.

About Advanced Micro Devices (Get Rating)

Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom. Its products include x86 microprocessors as an accelerated processing unit, chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services; and server and embedded processors, and semi-custom System-on-Chip (SoC) products, development services, and technology for game consoles. The company provides processors for desktop and notebook personal computers under the AMD Ryzen, AMD Ryzen PRO, Ryzen Threadripper, Ryzen Threadripper PRO, AMD Athlon, AMD Athlon PRO, AMD FX, AMD A-Series, and AMD PRO A-Series processors brands; discrete GPUs for desktop and notebook PCs under the AMD Radeon graphics, AMD Embedded Radeon graphics brands; and professional graphics products under the AMD Radeon Pro and AMD FirePro graphics brands. It also offers Radeon Instinct, Radeon PRO V-series, and AMD Instinct accelerators for servers; chipsets under the AMD trademark; microprocessors for servers under the AMD EPYC; embedded processor solutions under the AMD Athlon, AMD Geode, AMD Ryzen, AMD EPYC, AMD R-Series, and G-Series processors brands; and customer-specific solutions based on AMD CPU, GPU, and multi-media technologies, as well as semi-custom SoC products. It serves original equipment manufacturers, public cloud service providers, original design manufacturers, system integrators, independent distributors, online retailers, and add-in-board manufacturers through its direct sales force, independent distributors, and sales representatives. The company was incorporated in 1969 and is headquartered in Santa Clara, California.

About Rambus (Get Rating)

Rambus Inc. provides semiconductor products in the United States, Taiwan, South Korea, Japan, Europe, Canada, Singapore, China, and internationally. The company offers DDR memory interface chips, including DDR5, DDR4 and DDR3 memory interface chips to module manufacturers and OEMs; silicon IP comprising, interface and security IP solutions that move and protect data in advanced applications; and physical interface and digital controller IP to offer industry-leading, integrated memory and interconnect subsystems. It also provides a portfolio of patents that covers memory architecture, high-speed serial links, and security products. The company markets its products and services through its direct sales force and distributors. Rambus Inc. was incorporated in 1990 and is headquartered in San Jose, California.

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