Buy AMD in anticipation of the next gen game consoles Ps5 and Xbox X

Next console cycle begins in the fall of 2020 with the release of the Sony PS5 and Msft Xbox X.

The console mkt is expected to grow from 50B to 75B by 2025. AMD offers the best CPUs and GPUs for gaming performances, and could become the reference for many years ahead. In previous cycles Microsoft and Sony relied on different suppliers (for CPUs/GPUs), this cycle AMD takes it all. AMD dollar revenue per console is expected to be a 75% step up from last year’s shipments for the PS4 (SOURCE: Newzoo, AtonRâ Partners, Xbox, Sony). 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 (will it burst this time?). A successful assault of $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.

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