Advanced Micro Devices (AMD) Gains As Market Dips: What You Should Know

Zacks Equity Research
·3 min read

Advanced Micro Devices (AMD) closed at $67.17 in the latest trading session, marking a +1.31% move from the prior day. The stock outpaced the S&P 500's daily loss of 0.21%. Meanwhile, the Dow lost 0.43%, and the Nasdaq, a tech-heavy index, added 0.01%.

Heading into today, shares of the chipmaker had lost 25.08% over the past month, lagging the Computer and Technology sector's loss of 11.89% and the S&P 500's loss of 9.7% in that time.

Advanced Micro Devices will be looking to display strength as it nears its next earnings release. In that report, analysts expect Advanced Micro Devices to post earnings of $1.05 per share. This would mark year-over-year growth of 43.84%. Our most recent consensus estimate is calling for quarterly revenue of $6.68 billion, up 54.79% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.36 per share and revenue of $26.23 billion. These totals would mark changes of +56.27% and +59.59%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Advanced Micro Devices. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.12% lower. Advanced Micro Devices is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Advanced Micro Devices's current valuation metrics, including its Forward P/E ratio of 15.2. For comparison, its industry has an average Forward P/E of 13.97, which means Advanced Micro Devices is trading at a premium to the group.

Also, we should mention that AMD has a PEG ratio of 0.56. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. AMD's industry had an average PEG ratio of 0.89 as of yesterday's close.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 90, putting it in the top 36% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow AMD in the coming trading sessions, be sure to utilize Zacks.com.


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