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

Zacks Equity Research

Advanced Micro Devices (AMD) closed the most recent trading day at $30.64, moving +1.96% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.01%. Elsewhere, the Dow gained 0.06%, while the tech-heavy Nasdaq lost 0.06%.

Heading into today, shares of the chipmaker had lost 5.8% over the past month, lagging the Computer and Technology sector's gain of 2.92% and the S&P 500's gain of 3.23% in that time.

AMD will be looking to display strength as it nears its next earnings release. On that day, AMD is projected to report earnings of $0.18 per share, which would represent year-over-year growth of 38.46%. Meanwhile, our latest consensus estimate is calling for revenue of $1.80 billion, up 9.08% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.63 per share and revenue of $6.76 billion, which would represent changes of +36.96% and +4.43%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for AMD. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. AMD is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note AMD's current valuation metrics, including its Forward P/E ratio of 47.83. For comparison, its industry has an average Forward P/E of 19.58, which means AMD is trading at a premium to the group.

It is also worth noting that AMD currently has a PEG ratio of 2.03. 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. The Electronics - Semiconductors industry currently had an average PEG ratio of 2.03 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 82, putting it in the top 33% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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