Categories Earnings, Technology
After a strong year, what 2020 has in store for Advanced Micro Devices (AMD)
Shares of Advanced Micro Devices (NASDAQ: AMD) are currently trading at an all-time high, after surpassing the record they had set nearly a decade ago. The company owes the bull run mostly to its revamped product line, which also helps it grab market share from rival chipmaker Intel Corp. (INTC).
AMD a Buy?
The good news is that even at its peak AMD is reasonably priced, attracting investors who are yet to add the stock to their portfolio. It has been creating shareholder value consistently and should keep doing it, considering the conducive market conditions. Moreover, experts see further improvement in the CPU market next year. Armed with its innovative product portfolio, AMD looks all set to tap the opportunity.
However, the high valuation ratios call for caution, given the relatively low margins that weigh on profitability. Moreover, the unimpressive return on assets does not justify the high spending. In short, there are downside risks that cannot be ignored. Currently, analysts’ consensus recommendation for the stock is moderate buy, with a price target of about $38 that represents a 13% downside.
Uptrend
Soon after the last quarterly report, the stock withdrew briefly from the highs, despite the firm posting stronger-than-expected earnings. The market was disappointed by the weak guidance issued by the management for the final months of the fiscal year. After the short-lived selloff, the stock regained strength in the following weeks.
Strong Sales
In the third quarter, solid performance by the Computing and Graphics division more than offset weakness in the enterprise segment, driving revenues by 9% to $1.8 billion. As a result, earnings rose in double digits to $0.18 per share. The results also topped the Street view.
Related: AMD Q3 2019 Earnings Conference Call Transcript
Intel, which is on the verge of being dethroned by AMD, slipped to a new low earlier this year when market watchers turned bearish after the company issued disappointing profit guidance. However, the stock recovered after a lot of struggle, while the company continued to lose ground in the data center market.
Most Popular
Key highlights from Deere & Co.’s (DE) Q4 2024 earnings results
Deere & Company (NYSE: DE) reported its fourth quarter 2024 earnings results today. Worldwide net sales and revenues decreased 28% year-over-year to $11.14 billion. Net income was $1.24 billion, or
NVDA Earnings: Nvidia Q3 profit jumps, beats estimates
NVIDIA Corporation (NASDAQ: NVDA) on Wednesday reported a sharp increase in adjusted profit and revenue for the third quarter of 2025. Earnings also topped analysts' estimates. The tech firm’s revenues
Lowe’s Companies (LOW): A few points to note about the Q3 2024 performance
Shares of Lowe’s Companies, Inc. (NYSE: LOW) rose over 1% on Wednesday. The stock has gained 8% over the past three months. The company delivered better-than-expected earnings results for the