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Advanced Micro Devices (AMD) Beats Stock Market Upswing: What Investors Need to Know

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Advanced Micro Devices (AMD - Free Report) ended the recent trading session at $159.54, demonstrating a +2.39% change from the preceding day's closing price. The stock outperformed the S&P 500, which registered a daily gain of 0.3%. At the same time, the Dow lost 0.48%, and the tech-heavy Nasdaq gained 0.03%.

Shares of the chipmaker witnessed a loss of 10.94% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 3.1%, and the S&P 500's gain of 2.09%.

Analysts and investors alike will be keeping a close eye on the performance of Advanced Micro Devices in its upcoming earnings disclosure. The company is predicted to post an EPS of $1.17, indicating a 27.17% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $8.71 billion, reflecting a 27.77% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $3.95 per share and a revenue of $32.73 billion, demonstrating changes of +19.34% and +26.92%, respectively, from the preceding year.

Investors should also pay attention to any latest changes in analyst estimates for Advanced Micro Devices. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.34% higher. As of now, Advanced Micro Devices holds a Zacks Rank of #3 (Hold).

From a valuation perspective, Advanced Micro Devices is currently exchanging hands at a Forward P/E ratio of 39.49. This represents a premium compared to its industry average Forward P/E of 20.71.

Investors should also note that AMD has a PEG ratio of 1.46 right now. 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. As of the close of trade yesterday, the Computer - Integrated Systems industry held an average PEG ratio of 1.95.

The Computer - Integrated Systems industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 33, this industry ranks in the top 14% of all industries, numbering over 250.

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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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