Today, tech media are reporting on excellent earnings reports by AMD yesterday, which propelled the company’s stock up 5% immediately following reports that the company did exceedingly well in Q1.
“We delivered solid first quarter results with significant gross margin expansion as Ryzen and EPYC processor and datacenter GPU revenue more than doubled year-over-year,” said Dr. Lisa Su, AMD president and CEO in a press statement. “We look forward to the upcoming launches of our next-generation 7nm PC, gaming and datacenter products which we expect to drive further market share gains and financial growth.”
As a hardware business that provides cryptocurrency mining equipment, AMD had been hard-hit by the bear market over the last six months or so.
Now, as Bitcoin floats above the $5000 mark, AMD is prospering along with other secondary companies like Nvidia.
“(AMD news) has given the bulls a solid handhold for now, even following a miss and sharp guide-down last quarter,” says Bernstein analyst Stacy Rasgon, according to MarketWatch coverage. “That being said, the key near-term controversy hinges upon the achievability of that outlook.”
The current news from AMD is an excellent example of how cryptocurrency changes affect other secondary markets. So many investors don’t broaden their view to see beyond the value of owning a particular coin – but in a market known for collaborative gains, that can be short-sighted.
With so much controversy over whether to buy and hold Bitcoin (or Ethereum or Ripple, etc.), some smart investors are instead reaching into the secondary markets and picking up stocks that are bound to increase based on cryptocurrency progress, but also work on other factors and in other parts of the industry.
For example, a broader blockchain play does not restrict the investment to just coin networks, but looks at how healthcare companies, government agencies, large multinational corporations and others are adding blockchain technologies to their enterprise systems for tracking and data governance purposes. With that said, finance is still a common focus, albeit in a broader outlook on blockchain disruption.
“Blockchain technology’s eventual impact on the overall stock market ecosystem seems, according to many industry watchers, limitless,” wrote Aron Elliot in Investor.com late in 2018. “But the early targets for blockchain stock market disruption focus on two areas: trade clearance and settlement, and private equities liquidity.”
If you are involved in following the coin markets, add stocks like AMD to your investor window, as well as broader blockchain offerings, to stay diversified in your market research.