Advanced Micro Devices (NASDAQ: AMD) is currently trading 50% below its previous high at a forward P/E of 29, following a 55% year-over-year increase in adjusted earnings for Q1. In the same quarter, data center revenue grew by 57%, aided by AMD’s recent acquisition of ZT Systems. Notably, Amazon invested $84 million in AMD, further solidifying its market position.
Constellation Software (OTC: CNSWF), based in Canada, has seen its stock surge over 200% in the last five years, driven by a successful strategy of acquiring niche software companies. The vertical software industry, valued at over $150 billion, is expected to grow at an annualized rate of 13%, pointing to long-term potential for Constellation, which reported a 13% growth in Q1 revenue year-over-year.
Key financial indicators show significant potential for both companies: AMD’s data center business is set for growth anticipated by major cloud providers, while Constellation has sustained a compound annual growth rate of approximately 20% in revenue and free cash flow over the past decade.
