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

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Advanced Micro Devices (AMD) closed the most recent trading day at $87.54, moving -0.64% from the previous trading session. This move lagged the S&P 500's daily gain of 0.13%. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, lost 0.06%.

Prior to today's trading, shares of the chipmaker had gained 1.17% over the past month. This has outpaced the Computer and Technology sector's loss of 13.84% and lagged the S&P 500's gain of 5.55% in that time.

Advanced Micro Devices will be looking to display strength as it nears its next earnings release, which is expected to be August 2, 2022. On that day, Advanced Micro Devices is projected to report earnings of $1.03 per share, which would represent year-over-year growth of 63.49%. Meanwhile, our latest consensus estimate is calling for revenue of $6.52 billion, up 69.43% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.35 per share and revenue of $26.26 billion. These totals would mark changes of +55.91% and +59.8%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Advanced Micro Devices. These revisions help to show the ever-changing nature of 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. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Over the past month, the Zacks Consensus EPS estimate has moved 0.58% lower. Advanced Micro Devices is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Advanced Micro Devices currently has a Forward P/E ratio of 20.25. This represents a premium compared to its industry's average Forward P/E of 15.15.

Investors should also note that AMD has a PEG ratio of 0.72 right now. 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 1.08 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 140, putting it in the bottom 45% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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