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Advanced Micro Devices (AMD) Outpaces Stock Market Gains: What You Should Know

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In the latest trading session, Advanced Micro Devices (AMD) closed at $81.55, marking a +0.3% move from the previous day. This change outpaced the S&P 500's 0.18% gain on the day.

Heading into today, shares of the chipmaker had gained 9.01% over the past month, outpacing the Computer and Technology sector's gain of 6.46% and the S&P 500's gain of 2.43% in that time.

Investors will be hoping for strength from AMD as it approaches its next earnings release. In that report, analysts expect AMD to post earnings of $0.54 per share. This would mark year-over-year growth of 200%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.61 billion, up 86.86% from the year-ago period.

AMD's full-year Zacks Consensus Estimates are calling for earnings of $2.16 per share and revenue of $14.69 billion. These results would represent year-over-year changes of +67.44% and +50.46%, respectively.

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

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. AMD is currently a Zacks Rank #2 (Buy).

Looking at its valuation, AMD is holding a Forward P/E ratio of 37.62. This represents a premium compared to its industry's average Forward P/E of 17.86.

We can also see that AMD currently has a PEG ratio of 1.07. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Electronics - Semiconductors stocks are, on average, holding a PEG ratio of 1.59 based on yesterday's closing prices.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 87, which puts it in the top 35% 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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