AMD and Constellation Software: Long-Term Investment Picks

Investors should consider purchasing stocks of Advanced Micro Devices and Constellation Software for long-term gains. AMD's strong earnings growth and market share potential in the semiconductor space, along with Constellation's impressive free cash flow and revenue growth, are attractive factors.

Date: 07-06-2025

AI Rating: 7

**Advanced Micro Devices (AMD)** has shown remarkable financial growth, making it an appealing opportunity for investors. The stock is currently trading at a significant discount, being down 50% from its previous highs, and offers a forward Price to Earnings ratio of 29. Importantly, AMD recently posted a staggering 55% year-over-year increase in adjusted earnings, indicating a robust earnings trajectory. This performance is further bolstered by a 57% growth in data center revenue compared to the previous year, reflecting the company's strong position in the growing demand for cloud computing services. Furthermore, the recent acquisition of ZT Systems aims to enhance AMD's data center offerings, making them more appealing to major cloud service providers. Such developments are crucial for positioning AMD favorably against competitors like Nvidia and Intel. The substantial investment from Amazon in AMD reinforces the former's credibility and market status. **Rating for AMD:** 8/10 **Constellation Software (CNSWF)**, despite being less visible on Wall Street, boasts a strong track record in the vertical software market. The company’s model is centered around using free cash flow to acquire high-growth software companies. Achieving over 200% returns in the past five years and maintaining a 20% annual revenue growth rate shows solid fundamentals. In Q1, revenue increased 13% year-on-year, which coupled with a 14% increase in free cash flow signifies solid profitability. The vertical software sector's projected growth indicates considerable potential for Constellation’s market expansion. **Rating for Constellation Software:** 7/10. Both companies exhibit promising financial data that suggest positive momentum in their respective industries, driven by strong earnings growth and strategic acquisitions, which can positively impact stock prices over the next few months.

Stocks: AMD CNSWF