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Advanced Micro Devices (AMD) Stock Falls as Market Rise: What You Need to Know

In the latest trading session, Advanced Micro Devices (AMD) closed at $110.61, marking a move of -0.31% from the previous day. This change lagged the S&P 500’s daily gain of 0.4%. Elsewhere, the Dow gained 0.52% and the tech-heavy Nasdaq rose 10.86%.

Heading into today, shares of the chipmaker have gained 0.85% over the past month, lagging the Computer & Technology sector’s gain of 2.6% and the S&P 500’s gain of 3.98% in that time.

As its next earnings report date approaches, Wall Street will be watching for positive news from Advanced Micro Devices. This is expected to be August 1, 2023. In this report, analysts expect Advanced Micro Devices to report earnings per share of $0.57. This would represent a year-on-year decline of 45.71%. Meanwhile, our latest consensus estimate is calling for revenue of $5.32 billion, down 18.73% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates suggest that analysts are expecting earnings of $2.82 per share and revenue of $22.97 billion. These totals would represent changes of -19.43% and -2.69%, respectively, from last year.

Investors may also notice recent changes to analyst estimates for Advanced Micro Devices. Recent changes usually reflect the latest short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company’s business prospects.

Research indicates that these estimate changes are directly correlated with near-term stock price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Past Over 30 days, our consensus EPS projection moved down 0.59%. Advanced Micro Devices is currently sporting a Zacks Rank #3 (Hold).

Looking at its valuation, Advanced Micro Devices has a Forward P/E ratio of 39.38. For comparison, the industry’s average P/E is 27.42, which means Advanced Micro Devices is valued at a premium to the group.

It is also worth adding that AMD currently has a PEG ratio of 6.46. This popular ratio is similar to the commonly known P/E ratio, with the difference that the PEG ratio also takes into account the expected growth dynamics of the company’s earnings. As of yesterday’s close, AMD’s industry average PEG ratio was 4.

The Electronics and Semiconductors industry is part of the Computers and Technology sector. This group has a Zacks Industry Rank of 110, putting it in the top 44% of all 250+ industries.

The Zacks Industry Rank ranks from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that industries that receive a top 50% rating outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to track all of these stock moving metrics and more during the upcoming trading sessions.

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