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Advanced Micro Devices (AMD) Outpaces Stock Market Gains: What You Should Know

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Advanced Micro Devices (AMD - Free Report) closed at $28.99 in the latest trading session, marking a +0.94% move from the prior day. This move outpaced the S&P 500's daily gain of 0.51%. At the same time, the Dow added 0.36%, and the tech-heavy Nasdaq gained 0.75%.

Heading into today, shares of the chipmaker had lost 8.68% over the past month, lagging the Computer and Technology sector's gain of 2.59% and the S&P 500's gain of 3.44% in that time.

Investors will be hoping for strength from AMD as it approaches its next earnings release. In that report, analysts expect AMD to post earnings of $0.08 per share. This would mark a year-over-year decline of 38.46%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.80 billion, up 9.08% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.63 per share and revenue of $6.76 billion, which would represent changes of +36.96% and +4.43%, respectively, from the prior year.

Any recent changes to analyst estimates for AMD should also be noted by investors. Recent revisions tend to reflect the latest near-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. 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.

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. The Zacks Consensus EPS estimate remained stagnant within the past month. AMD is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note AMD's current valuation metrics, including its Forward P/E ratio of 45.71. This valuation marks a premium compared to its industry's average Forward P/E of 19.05.

Also, we should mention that AMD has a PEG ratio of 1.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Electronics - Semiconductors industry currently had an average PEG ratio of 1.94 as of yesterday's close.

The Electronics - Semiconductors industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 81, which puts it in the top 32% 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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