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

Advanced Micro Devices (AMD) closed at $78.93 in the latest trading session, marking a +1.32% move from the prior day. This change outpaced the S&P 500's 0.52% gain on the day. Meanwhile, the Dow gained 0.01%, and the Nasdaq, a tech-heavy index, added 1.21%.

Coming into today, shares of the chipmaker had lost 5.48% in the past month. In that same time, the Computer and Technology sector gained 0.89%, while the S&P 500 gained 0.49%.

Wall Street will be looking for positivity from AMD as it approaches its next earnings report date. On that day, AMD is projected to report earnings of $0.36 per share, which would represent year-over-year growth of 100%. Our most recent consensus estimate is calling for quarterly revenue of $2.56 billion, up 42% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.10 per share and revenue of $8.89 billion. These totals would mark changes of +71.88% and +32.03%, respectively, from last year.

Any recent changes to analyst estimates for AMD should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-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. 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 remained stagnant. AMD is currently a Zacks Rank #3 (Hold).

In terms of valuation, AMD is currently trading at a Forward P/E ratio of 70.66. For comparison, its industry has an average Forward P/E of 19.1, which means AMD is trading at a premium to the group.

Investors should also note that AMD has a PEG ratio of 1.54 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. AMD's industry had an average PEG ratio of 1.56 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 70, putting it in the top 28% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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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