Advanced Micro Devices ( AMD ) reported quarterly earnings of $0.69 per share, beating the Zacks’ consensus estimate of $0.66 per share. This compares to earnings of $0.92 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents a 4.55% revenue surprise. A quarter ago, this chipmaker was expected to post earnings of $0.67 per share, which is no surprise.

In the past four quarters, the company has beaten consensus EPS estimates three times.

Advanced Micro, owned by the Zacks Electronics – Semiconductors industry, reported revenue of $5.6 billion for the quarter ended December 2022, beating the Zacks Consensus Estimate by 1.58%. That compares to $4.83 billion in revenue a year ago. The company has tripled consensus revenue estimates over the past four quarters.

The sustainability of the stock’s immediate price movement, based on recently released numbers and future earnings expectations, largely depends on management’s comments on the earnings call.

Advanced micro stocks are up about 11.9% since the start of the year, compared with the S&P 500’s 4.6% gain.

What’s Next for Advanced Micro?

While Advanced Micro has dominated the market this year, the question on investors’ minds is: What’s next for the stock?

There are no easy answers to this key question, but one reliable step to help investors figure it out is a company’s earnings outlook. This includes not only current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed recently.

Empirical research shows a strong correlation between recent stock movements and earnings estimate revisions. Investors can monitor such revisions themselves or rely on a tried-and-tested rating tool like Zacks Ratings, which has a proven track record of using revisions to earnings estimates.

Prior to this earnings release, speculative revisions advanced micro: Inconvenient. While the magnitude and direction of estimate revisions may change following the company’s just-released earnings report, the current status translates to a Zacks Rank #4 (Sell) for the stock. Hence, the shares are expected to underperform the market in the near term. You can see the full list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It will be interesting to see how the estimates for the upcoming quarter and the current fiscal year change in the coming days. The current consensus EPS estimate is $0.69 on revenue of $5.57 billion for the upcoming quarter and $3.45 on revenue of $24.41 billion for the fiscal year.

Investors should remember that the attitude towards the industry can have a material impact on the performance of the stock. According to the Zacks Industry Ranking, Electronics – Semiconductors is currently at a low of 37% of the 250 plus Zacks Industries. Our research shows that the top 50% of industries in the Zacks Rank outperform the bottom 50% by a factor of 2 to 1.

Another stock from the same industry, nLight (LASR), has yet to report results for the December 2022 quarter. The results are expected to be released on February 23.

This laser maker is expected to post a quarterly loss of $0.15 in its next report, which represents a change of -1400% year over year. Quarterly consensus EPS estimates have remained unchanged over the past 30 days.

nLight’s revenues are expected to be $56.67 million, down 16% from the previous quarter.

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