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Advanced Micro Devices (AMD) Dips More Than Broader Markets: What You Should Know

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In the latest trading session, Advanced Micro Devices (AMD - Free Report) closed at $110.19, marking a -0.19% move from the previous day. This move lagged the S&P 500's daily loss of 0.04%. Elsewhere, the Dow lost 0.22%, while the tech-heavy Nasdaq added 2.93%.

Heading into today, shares of the chipmaker had lost 11.88% over the past month, lagging the Computer and Technology sector's gain of 2.92% and the S&P 500's gain of 4.22% in that time.

Advanced Micro Devices will be looking to display strength as it nears its next earnings release. In that report, analysts expect Advanced Micro Devices to post earnings of $0.57 per share. This would mark a year-over-year decline of 45.71%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.32 billion, down 18.73% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.83 per share and revenue of $22.97 billion, which would represent changes of -19.14% and -2.66%, respectively, from the prior year.

Any recent changes to analyst estimates for Advanced Micro Devices should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. The Zacks Consensus EPS estimate remained stagnant within the past month. Advanced Micro Devices currently has a Zacks Rank of #3 (Hold).

Investors should also note Advanced Micro Devices's current valuation metrics, including its Forward P/E ratio of 39.02. This valuation marks a premium compared to its industry's average Forward P/E of 27.47.

We can also see that AMD currently has a PEG ratio of 6.4. 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. The Electronics - Semiconductors was holding an average PEG ratio of 5.26 at yesterday's closing price.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 196, which puts it in the bottom 23% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. 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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