Followers | 680 |
Posts | 141209 |
Boards Moderated | 36 |
Alias Born | 03/10/2004 |
Monday, May 02, 2022 9:50:01 AM
By: Investing.com | May 2, 2022
• Reports Q1 2022 results on Tuesday, May 3, after the market close
• Revenue Expectation: $5.01 billion
• EPS Expectation: $0.91
When Advanced Micro Devices (NASDAQ:AMD) releases its latest quarterly earnings on Tuesday, after the close, the chipmaker may again show robust demand for its products which are used in data centers, cell phones, and gaming consoles. The Santa Clara, California-based AMD reported in February that its first quarter sales will be better than what Wall Street estimated at that time.
Indeed, after the high double-digit sales expansion during the past two years, AMD is reaching a level of profitability nearly identical to arch-rival Intel (NASDAQ:INTC)—something that would have been inconceivable just a few years ago.
AMD Weekly TTM
Still, despite producing stellar quarterly growth figures for a number of quarters in a row, investors have shunned AMD stock this year. Shares, which closed on Friday at $85.52, are down more than 40% this year, making AMD one of the worst-performing chip stocks.
This divergence between growth and the stock performance shows that investors don’t see a rosy future for the industry going forward, given rapidly increasing interest rates and inflationary pressures which are clearly not transient.
The chip sector belongs to those segments of the economy that are considered highly cyclical. Historically, the industry generally ends up managing a high level of inventories whenever the global economy slips into a recession.
The Philadelphia Semiconductor Index, often referred to as the SOX, has shed about 25% gains this year after accelerating at least 40% in each of the past three years. The decline has wiped out more than $750 billion in market value.
Recession Threat
That downturn comes as a number of economists believe it will be tough for the Federal Reserve to avoid a recession if it raises interest rates too aggressively. According to Goldman Sachs, the central bank will face a difficult task in tightening monetary policy enough to cool inflation without causing a US recession, with the odds of a contraction at about 35% over the next two years.
Yet, AMD’s rapidly expanding market share and its track record of exceeding expectations have prompted some analysts to advise clients to take advantage of this weakness. Of 40 analysts polled by Investing.com, 24 have a “buy” rating on the stock, while 15 are "neutral."
AMD Consensus Estimate
Source: Investing.com
Their 12-month consensus price target of $145.51 implies a 70% upside potential.
Raymond James in a note last week upgraded AMD to a strong buy and increased its price target to $160, saying:
“As we have become more concerned about cycle risks given potential for slowing consumer demand and elevated inventory levels at customers, we favor those semi companies with strong secular drivers, more muted cyclical exposure and attractive valuations, for which AMD appears well positioned."
The note also said AMD will continue to provide tough competition for Intel which is struggling to ramp up its production.
“With INTC’s roadmap not showing parity with AMD until at least the end of 2024, we think continued share gains for AMD in datacenter are likely inevitable, and we believe tight supply conditions are encouraging customers to commit to AMD to ensure supply.”
Bottom Line
The pullback in AMD shares could be a buying opportunity for long-term investors as the company continues to report robust earnings, providing a solid reason to remain bullish about its growth prospects going forward.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
• DiscoverGold
Recent AMD News
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 08:32:28 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 08:30:00 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 08:27:24 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 08:23:47 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 08:20:31 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 08:18:25 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 08:16:23 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 08:13:59 PM
- Form 4 - Statement of changes in beneficial ownership of securities • Edgar (US Regulatory) • 05/10/2024 08:09:15 PM
- Form 144 - Report of proposed sale of securities • Edgar (US Regulatory) • 05/08/2024 08:24:51 PM
- AMD Receives IEEE 2024 Corporate Innovation Award for Leadership in Chiplet Design for High-Performance and Adaptive Computing • GlobeNewswire Inc. • 05/08/2024 01:00:00 PM
- Optiver Chooses AMD Enterprise Portfolio to Power its Data Center Modernization, Enabling New Era of Compute and AI • GlobeNewswire Inc. • 05/07/2024 01:00:00 PM
- Easing Worries About Possible Rate Hike May Generate Buying Interest • IH Market News • 05/02/2024 01:06:30 PM
- U.S. Stocks Close Mixed Following Post-Fed Volatility • IH Market News • 05/01/2024 08:35:00 PM
- AMD Reports First Quarter 2024 Financial Results • GlobeNewswire Inc. • 04/30/2024 08:15:11 PM
- U.S. Index Futures Point to Mild Decline Ahead of Key Earnings and Fed Rate Decision • IH Market News • 04/30/2024 11:59:59 AM
- United Shares Surge 5.3% in Q1 2024 Earnings Beat; Take-Two Cuts 5% of Workforce, and More News • IH Market News • 04/17/2024 10:57:39 AM
- AMD to Report Fiscal First Quarter 2024 Financial Results • GlobeNewswire Inc. • 04/16/2024 08:15:00 PM
- AMD launches AI chips for business laptops and desktops • IH Market News • 04/16/2024 02:43:08 PM
- AMD Expands Commercial AI PC Portfolio to Deliver Leadership Performance Across Professional Mobile and Desktop Systems • GlobeNewswire Inc. • 04/16/2024 01:00:00 PM
- Paramount Global Board Shrinks, Morgan Stanley Faces Regulatory Probe, and More News • IH Market News • 04/12/2024 11:05:29 AM
- Delta Generates US$37 Million Profit in Q1, Google and Intel Unveil Cutting-Edge AI Chips, and More News • IH Market News • 04/10/2024 11:13:48 AM
- AMD Extends Leadership Adaptive SoC Portfolio with New Versal Series Gen 2 Devices Delivering End-to-End Acceleration for AI-Driven Embedded Systems • GlobeNewswire Inc. • 04/09/2024 08:15:00 AM
- AMD Recommends Rejection of “Mini-Tender” Offer from Tutanota LLC • GlobeNewswire Inc. • 04/01/2024 08:15:00 PM
- U.S. Stocks May Move Back To The Upside In Early Trading • IH Market News • 03/26/2024 01:09:44 PM
Avant Technologies Equipping AI-Managed Data Center with High Performance Computing Systems • AVAI • May 10, 2024 8:00 AM
VAYK Discloses Strategic Conversation on Potential Acquisition of $4 Million Home Service Business • VAYK • May 9, 2024 9:00 AM
Bantec's Howco Awarded $4.19 Million Dollar U.S. Department of Defense Contract • BANT • May 8, 2024 10:00 AM
Element79 Gold Corp Successfully Closes Maverick Springs Option Agreement • ELEM • May 8, 2024 9:05 AM
Kona Gold Beverages, Inc. Achieves April Revenues Exceeding $586,000 • KGKG • May 8, 2024 8:30 AM
Epazz plans to spin off Galaxy Batteries Inc. • EPAZ • May 8, 2024 7:05 AM