Advanced Micro Devices (AMD) has recently captured significant attention as one of the most sought-after stocks on Zacks.com. The chipmaker’s share price has shown noteworthy momentum, returning +14.4% over the past month, outpacing the Zacks S&P 500 composite’s gain of +9.1%. Furthermore, the Zacks Computer – Integrated Systems industry, encompassing AMD, has seen a robust increase of 16.4% during this same timeframe.
A key consideration for investors looking at AMD is the future trajectory of its stock price, which is often influenced by market speculation and media reports regarding changes in business dynamics. However, the fundamental factors, especially the company’s earnings projections, play a crucial role in long-term investment decisions.
Zacks places substantial importance on tracking revisions in earnings estimates from sell-side analysts. These projections are critical as they reflect expected future earnings, which fundamentally determine the fair value of the stock. A rise in earnings expectations generally increases the stock’s fair value, attracting investor interest and potentially driving up the share price.
Currently, AMD is forecasted to post earnings of $0.65 per share for the current quarter, marking a decline of -5.8% from the same period last year. Notably, the Zacks Consensus Estimate has been adjusted downwards by -42.4% over the last month. Looking ahead, the consensus estimate for the fiscal year stands at $4.09, indicating an increase of +23.6% from the previous year, despite a downward revision of -13.5% over the last 30 days. For the next fiscal year, the earnings estimate of $5.70 suggests a promising increase of +39.4% compared to the current expectations.
To gauge near-term price performance, Zacks employs its proprietary stock rating tool, the Zacks Rank. This tool considers not only the magnitude of earnings estimate changes but also additional elements related to earnings projections. Presently, AMD holds a Zacks Rank of #3 (Hold), reflecting the adjustments made to its earnings estimates.
Investors observing AMD should remain attentive to how these earnings projections evolve, as they will be instrumental in shaping the company’s stock performance. With positive expectations for the long term, AMD may present opportunities despite the recent downward revisions in near-term estimates.