Have you been paying attention to shares of Advanced Micro Devices (AMD)? Shares have been on the move with the stock up 65.8% over the past month. The stock hit a new 52-week high of $362.79 in the previous session. Advanced Micro has gained 68.4% since the start of the year compared to the 11% move for the Zacks Computer and Technology sector and the 43.3% return for the Zacks Computer - Integrated Systems industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 3, 2026, Advanced Micro reported EPS of $1.53 versus consensus estimate of $1.32 while it beat the consensus revenue estimate by 6.24%.
For the current fiscal year, Advanced Micro is expected to post earnings of $6.8 per share on $45.58 in revenues. This represents a 63.07% change in EPS on a 31.58% change in revenues. For the next fiscal year, the company is expected to earn $10.36 per share on $61.06 in revenues. This represents a year-over-year change of 52.38% and 33.96%, respectively.
Valuation Metrics
While Advanced Micro has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Advanced Micro has a Value Score of F. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 53X current fiscal year EPS estimates, which is a premium to the peer industry average of 24.4X. On a trailing cash flow basis, the stock currently trades at 70.4X versus its peer group's average of 50.1X. Additionally, the stock has a PEG ratio of 1.11. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this is even more important than the company's VGM Score. Fortunately, Advanced Micro currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Advanced Micro passes the test. Thus, it seems as though Advanced Micro shares could still be poised for more gains ahead.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
