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Advanced Micro Devices (AMD) Gains But Lags Market: What You Should Know

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Advanced Micro Devices (AMD - Free Report) closed at $150.68 in the latest trading session, marking a +1.05% move from the prior day. This move lagged the S&P 500's daily gain of 1.42%. At the same time, the Dow added 1.82%, and the tech-heavy Nasdaq gained 0.61%.

Coming into today, shares of the chipmaker had gained 14.23% in the past month. In that same time, the Computer and Technology sector lost 1.17%, while the S&P 500 lost 2.09%.

Investors will be hoping for strength from Advanced Micro Devices as it approaches its next earnings release. On that day, Advanced Micro Devices is projected to report earnings of $0.75 per share, which would represent year-over-year growth of 44.23%. Our most recent consensus estimate is calling for quarterly revenue of $4.51 billion, up 39.04% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.64 per share and revenue of $16.12 billion, which would represent changes of +104.65% and +65.1%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for Advanced Micro Devices. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Advanced Micro Devices currently has a Zacks Rank of #2 (Buy).

Digging into valuation, Advanced Micro Devices currently has a Forward P/E ratio of 56.42. For comparison, its industry has an average Forward P/E of 23.7, which means Advanced Micro Devices is trading at a premium to the group.

Investors should also note that AMD has a PEG ratio of 1.22 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. The Electronics - Semiconductors was holding an average PEG ratio of 1.52 at yesterday's closing price.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 42, putting it in the top 17% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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