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2 days ago
AMD Stock Suffers Another Post-Earnings Meltdown
By: Schaeffer's Investment Research | February 5, 2025
• AMD is one of the worst stocks on the Nasdaq today
• Over 1.1 million AMD options have changed hands already today
Advanced Micro Devices Inc (NASDAQ:AMD) is the talk of Wall Street today, last seen down 9.4% to trade at $108.23. The chipmaker is getting bashed after a lackluster fourth-quarter report that saw a top-line beat overshadowed by its data center arm reporting less-than-stellar revenue estimates.
AMD earlier traded at a two-year low of $106.50, and is on track for its worst single-session decline since its Oct. 30 post-earnings bear gap. The shares have carved a channel of lower lows since October, and are now down 35.3% in the last 12 months. The days of trading up at $227.30 on March 8 of last year are long gone.
With the chip stock stuck in a serious slide, a rush of bear notes today are exacerbating matters. No fewer than 17 brokerages trimmed their price targets, the worst coming from Wells Fargo to $140 from $165. Citigroup came in the hottest though, downgrading the security to "neutral" from "buy."
More revisions could weigh on the equity going forward. Of the 39 brokerages covering AMD, 29 maintain "buy" or better ratings, with zero "sells" on the books, while its 12-month consensus price target of $154.54 is a 43% premium to the stock's current perch.
Options traders are feasting today. At last check, over 1.07 million contracts have exchanged hands, volume that's triple the average intraday amount. Calls are winning out on an absolute basis, with the weekly 2/7 110-strike call the most popular.
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DiscoverGold
3 weeks ago
Advanced Micro Devices $AMD Bullish Outlook...
By: Peter DiCarlo | January 19, 2025
• We're taking an aggressively bullish stance on AMD once more. Although we're still in our smart money zone, the weekly BX Trender has shifted from dark red to light red, marking our initial sign of bullish accumulation. It's worth noting that a similar setup resulted in a loss a few weeks back, so success isn't guaranteed.
However, the risk versus reward ratio for the next six to 12 months looks exceptionally promising. I'm reactivating all trading bots and will focus on trading call options, targeting prices between $140 and $160 over the next three to six months.
Should the weekly BX Trender once again show lower lows and turn dark red, we'll retract our bullish position and exit the trade.
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DiscoverGold
4 weeks ago
Advanced Micro Devices, Inc. (AMD) Is a Trending Stock
By: Zacks Investment Research | January 13, 2025
Advanced Micro Devices (AMD) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.
Shares of this chipmaker have returned -8.6% over the past month versus the Zacks S&P 500 composite's -2.2% change. The Zacks Computer - Integrated Systems industry, to which Advanced Micro belongs, has lost 5.2% over this period. Now the key question is: Where could the stock be headed in the near term?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Earnings Estimate Revisions
Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Advanced Micro is expected to post earnings of $1.07 per share, indicating a change of +39% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.5% over the last 30 days.
The consensus earnings estimate of $3.31 for the current fiscal year indicates a year-over-year change of +24.9%. This estimate has changed -0.3% over the last 30 days.
For the next fiscal year, the consensus earnings estimate of $4.88 indicates a change of +47.6% from what Advanced Micro is expected to report a year ago. Over the past month, the estimate has changed -0.3%.
With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Advanced Micro.
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue Growth
While earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.
For Advanced Micro, the consensus sales estimate for the current quarter of $7.52 billion indicates a year-over-year change of +21.8%. For the current and next fiscal years, $25.66 billion and $32.27 billion estimates indicate +13.1% and +25.8% changes, respectively.
Last Reported Results and Surprise History
Advanced Micro reported revenues of $6.82 billion in the last reported quarter, representing a year-over-year change of +17.6%. EPS of $0.92 for the same period compares with $0.70 a year ago.
Compared to the Zacks Consensus Estimate of $6.71 billion, the reported revenues represent a surprise of +1.59%. The EPS surprise was +1.1%.
Over the last four quarters, Advanced Micro surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.
Valuation
Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S) and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.
The Zacks Value Style Score (part of the Zacks Style Scores system), which pays close attention to both traditional and unconventional valuation metrics to grade stocks from A to F (an An is better than a B; a B is better than a C; and so on), is pretty helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Advanced Micro is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Conclusion
The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Advanced Micro. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.
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4 weeks ago
Citi Backs AMD as Notebook Shipments Beat Expectations, Intel Gets Neutral Amid PC Slowdown
By: gurufocus | January 13, 2025
Citi reaffirmed its stance on AMD AMD and Intel INTC
after December notebook shipments surpassed the firm's forecasts. "December notebook shipments rose 8% month-over-month, outperforming our expectations of a 4% increase," analyst Christopher Danely wrote in a client note.
He attributed the growth to new product launches and demand ahead of Chinese New Year and possible tariffs. Despite a 7% quarter-over-quarter decline in notebook shipments, the figures exceeded Danely's forecast of an 8% drop, although they trailed the typical seasonal 2% increase.
Danely kept his Buy rating on AMD and a Neutral rating on Intel, highlighting expectations for a 10% sequential decline in notebook shipments in Q1 2025, better than the usual 14% drop. This outlook aligns with Citi's view of continued sluggish PC demand. The better-than-expected December performance provides some optimism, but the overall market remains under pressure amid softer demand trends, Citi noted.
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DiscoverGold
4 weeks ago
$AMD is testing the smart money zone once again. However, the BX Trender is indicating lower lows and has turned dark red...
By: Peter DiCarlo | January 10, 2025
• $AMD Weekly Update
$AMD is testing the smart money zone once again. However, the BX Trender is indicating lower lows and has turned dark red.
This isn't a positive signal, suggesting potential stop hunting. Remember, the cornerstone of any proven strategy, including my own, revolves around safeguarding your capital. It's crucial to protect your downside—even at the expense of your accuracy rate.
Being wrong is acceptable if your successful trades compensate by a multiple of three for any losses. A 50% win rate can still be profitable under these conditions.
Barring any unforeseen positive developments, I plan to cut my losses on $AMD. While I maintain a bullish outlook for 2025, I see no justification to risk capital in the absence of buyer momentum.
Looking ahead, I'll adopt a patient approach and wait for a definitive confirmation of a market bottom.
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