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

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Advanced Micro Devices (AMD - Free Report) closed the latest trading day at $161.23, indicating a -0.34% change from the previous session's end. This move lagged the S&P 500's daily loss of 0.16%. Elsewhere, the Dow saw an upswing of 0.04%, while the tech-heavy Nasdaq depreciated by 0.18%.

Shares of the chipmaker have appreciated by 0.84% over the course of the past month, underperforming the Computer and Technology sector's gain of 6.77% and the S&P 500's gain of 3.15%.

Market participants will be closely following the financial results of Advanced Micro Devices in its upcoming release. The company's upcoming EPS is projected at $0.66, signifying a 13.79% increase compared to the same quarter of the previous year. At the same time, our most recent consensus estimate is projecting a revenue of $5.71 billion, reflecting a 6.54% rise from the equivalent quarter last year.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $3.41 per share and a revenue of $25.29 billion, indicating changes of +28.68% and +11.51%, respectively, from the former year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Advanced Micro Devices. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.17% lower. Advanced Micro Devices is currently a Zacks Rank #3 (Hold).

In terms of valuation, Advanced Micro Devices is presently being traded at a Forward P/E ratio of 47.44. Its industry sports an average Forward P/E of 40.07, so one might conclude that Advanced Micro Devices is trading at a premium comparatively.

We can also see that AMD currently has a PEG ratio of 1.43. 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 2.91 as of yesterday's close.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry, currently bearing a Zacks Industry Rank of 168, finds itself in the bottom 34% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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