Advanced Micro Devices Inc (AMD)

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AMD: 3 Popular Nasdaq 100 Stocks to Avoid Right Now
By: Stock News | August 16, 2022

• AMD – The Fed is expected to maintain its hawkish stance despite easing inflation numbers, which might impede the performance of the Nasdaq 100. Moreover, given the rising recession fears, it could be wise to avoid popular yet fundamentally weak Nasdaq 100 stocks, Advanced Micro Devices (AMD), Blackstone (BX), and BlackRock (BLK) now.

The Fed launched two back-to-back 75 bps rate hikes in June and July and is likely to maintain its hawkish stance in the September meeting as well, despite easing inflation.

Victoria Fernandez, the chief market strategist at Crossmark Global Investments, said, “For me, there’s not enough evidence for the Fed to make a huge pivot from where they are. I still think they’re considering 50, 75 basis points at the September meeting.”

Such extended monetary tightening might mar the performance of the interest rate-sensitive Nasdaq 100, which has lost 16.3% year-to-date. Moreover, lingering macroeconomic headwinds are concerning. According to Statista, there is a 5.9% probability that the United States will fall into another recession by June 2023, up from a previous estimate of 4.1%.

Furthermore, JPMorgan Chase CEO Jamie Dimon recently projected that there is a 20% to 30% chance of a “harder recession” and a similar chance of “something worse.”

Given the near-term uncertainties, we think it might be best to avoid popular Nasdaq 100 stocks Advanced Micro Devices, Inc. (AMD), Blackstone Inc. (BX), and BlackRock, Inc. (BLK) at this hour, considering their declining financials.

Advanced Micro Devices, Inc. (AMD)

AMD operates as a semiconductor company worldwide. The company has two segments- Computing and Graphics; and Enterprise, Embedded, and Semi-Custom. It serves original equipment manufacturers, public cloud service providers, original design manufacturers, system integrators, independent distributors, online retailers, and add-in-board manufacturers.

AMD’s net revenue increased 70.1% year-over-year to $6.55 billion for the second quarter ended June 25, 2022. However, its operating income came in at $526 million, down 36.7% year-over-year. Also, its net income came in at $447 million, down 37% year-over-year, while its EPS decreased 53.4% year-over-year to $0.27.

AMD’s forward EV/S of 6.12x is 95.7% higher than the industry average of 3.12x, while its forward P/S of 6.22x is 100% higher than the industry average of 3.12x.

The stock has lost 29.8% year-to-date to close the last trading session at $101.01.

AMD’s POWR Ratings reflect its poor prospects. It has an overall grade of D, which indicates a Sell in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

Also, the stock has a D grade for Stability. Click here to access the additional POWR Ratings for AMD (Growth, Value, Momentum, Sentiment, and Quality). AMD is ranked #85 out of 95 stocks in the Semiconductor & Wireless Chip industry.

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