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

Advanced Micro Devices (AMD) closed at $86.58 in the latest trading session, marking a +0.8% move from the prior day. The stock outpaced the S&P 500's daily loss of 1.59%.

Prior to today's trading, shares of the chipmaker had gained 1.46% over the past month. This has lagged the Computer and Technology sector's gain of 2.79% and the S&P 500's gain of 2.53% in that time.

Wall Street will be looking for positivity from AMD as it approaches its next earnings report date. This is expected to be July 27, 2021. The company is expected to report EPS of $0.54, up 200% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $3.62 billion, up 87.38% from the prior-year quarter.

AMD's full-year Zacks Consensus Estimates are calling for earnings of $2.17 per share and revenue of $14.71 billion. These results would represent year-over-year changes of +68.22% and +50.7%, respectively.

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. 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 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. Within the past 30 days, our consensus EPS projection has moved 0.24% higher. AMD is currently a Zacks Rank #2 (Buy).

Valuation is also important, so investors should note that AMD has a Forward P/E ratio of 39.67 right now. For comparison, its industry has an average Forward P/E of 17.72, which means AMD is trading at a premium to the group.

Also, we should mention that AMD has a PEG ratio of 1.13. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AMD's industry had an average PEG ratio of 1.48 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 119, putting it in the top 47% 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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