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

In the latest trading session, Advanced Micro Devices (AMD) closed at $83.58, marking a +1.2% move from the previous day. The stock outpaced the S&P 500's daily gain of 0.51%.

Coming into today, shares of the chipmaker had gained 6.65% in the past month. In that same time, the Computer and Technology sector gained 6.2%, while the S&P 500 gained 1.75%.

AMD will be looking to display strength as it nears its next earnings release. In that report, analysts expect AMD to post earnings of $0.54 per share. This would mark year-over-year growth of 200%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.61 billion, up 86.86% from the year-ago period.

AMD's full-year Zacks Consensus Estimates are calling for earnings of $2.16 per share and revenue of $14.69 billion. These results would represent year-over-year changes of +67.44% and +50.46%, respectively.

Investors might also notice recent changes to analyst estimates for AMD. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

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. Within the past 30 days, our consensus EPS projection remained stagnant. AMD is holding a Zacks Rank of #2 (Buy) right now.

Digging into valuation, AMD currently has a Forward P/E ratio of 38.21. For comparison, its industry has an average Forward P/E of 17.86, which means AMD is trading at a premium to the group.

Also, we should mention that AMD has a PEG ratio of 1.09. 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 1.56 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 97, which puts it in the top 39% 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.

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

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