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

Advanced Micro Devices (AMD) closed at $55.34 in the latest trading session, marking a +1.13% move from the prior day. The stock outpaced the S&P 500's daily gain of 0.91%. At the same time, the Dow added 0.85%, and the tech-heavy Nasdaq gained 0.59%.

Heading into today, shares of the chipmaker had gained 0.48% over the past month, lagging the Computer and Technology sector's gain of 8.52% and the S&P 500's gain of 5.26% in that time.

Wall Street will be looking for positivity from AMD as it approaches its next earnings report date. The company is expected to report EPS of $0.16, up 100% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.85 billion, up 21% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.01 per share and revenue of $8.39 billion, which would represent changes of +57.81% and +24.63%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for AMD. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, 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. Within the past 30 days, our consensus EPS projection remained stagnant. AMD is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that AMD has a Forward P/E ratio of 54.08 right now. This represents a premium compared to its industry's average Forward P/E of 20.77.

We can also see that AMD currently has a PEG ratio of 1.34. 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 1.73 based on yesterday's closing prices.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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