How the Market Works #1

To begin this simulation, I wanted to be more conservative in my spendings for my first investment since I'm not very educated on the stock market since I've only done limited research thus far. Prior to this class, the thought of even investing money into the stock market was a foreign concept to me so I was unsure on how much I should be spending and on which companies I should be spending them on. Finally, after researching various companies to invest it, I settled on investing approximately $5000 in stocks on two companies. However, below I will be describing only one of them as that is the company that I am most passionate about and have researched the most on. 

One of the companies that I chose to invest in was Advanced Micro Devices Inc., also known as AMD, which is a semiconductor company. Semiconductor companies manufacture small integral pieces in electronic devices and albeit they are relatively unknown, they are vital for electronic devices to function. Furthermore, in a growingly tech-oriented world, semiconductor companies are beneficial businesses to invest in and are fundamentally the future. Additionally, AMD is the second largest supplier for x86-based microprocessors, following Intel (Investopedia). The x86 central processing units are essentially the architecture in most desktops and laptops, and currently Intel is the biggest supplier of these since the company invented them. However, AMD is Intel's only competitor and is predicted to potentially take over Intel. Admittedly, Intel still holds majority of the CPU market under its grasp, but instead of looking at the number of shares each company holds, I believe that it's more important to look at the growth rate. A year ago, AMD's share of the CPU market stood at 12.3%, but according to last quarter's results, it now holds 17.1% of the market (Fool). Now, if we compare AMD's impressive growth rate with how Intel's been fairing, we see that Intel decreased in revenue in the second quarter by -2.69% from the same quarter in 2018 ( CSI Market) From this comparison, it is clear that AMD's stunning growth rate exemplifies how it is forecasted to continue earning a large revenue and progressing into Intel's territory, especially since there's no reason for it not to do so. We can also see that AMD's progress has lead to Intel's downfall and could potentially continue to do so. Therefore, I believed that investing in AMD was a beneficial idea since it is predicted to grow big and I will continue tracking its progress as the game goes by.