Advanced Micro Devices Stock News and Forecast: AMD earnings preview
- AMD spiked 8.6% on Monday.
- Advanced Micro Devices reports Q4 earnings after the market close on Tuesday.
- Wall Street expects $0.76 normalized EPS on $4.5 billion in revenue.
Advanced Micro Devices (AMD) stock is trading up 1.7% in Tuesday's premarket ahead of the release of Q4 earnings. AMD shares rallied 8.6% on Monday as part of a broad market rally. Wall Street consensus puts normalized non-GAAP earnings per share (EPS) at $0.76 on $4.5 billion in revenue. Shares are currently trading at $116.14 at the time of writing.
Advanced Micro Devices Stock News: AMD investors expect solid quarter
Investors will be listening on the earnings call about for further news about Advanced Micro Devices $35 billion acquisition of Xilinx. CEO Lisa Su said in November that she expected the acquisition to be finalized before the end of 2021. That day came and went, and just last week China finally gave approval for the deal though the wording had caveats regarding access to Xilinx products from Chinese companies.
In Q3 revenue grew 54% YoY, so the Q4 growth rate of 40% cannot be missed. If it is, AMD shares will likely take a tumble. AMD management has guided for an adjusted gross margin of 49.5%. Any miss here will sour at least some investors who are expecting outsided and even expanding margins due to the ongoing chip shortage.
Listeners will also zero in on what the CEO says in regard to 3rd generation EPYC processor sales being used in the company's data centre segment. As strong growth was noted here in Q3, investors will want to know how that unit is doing in terms of growth.
AMD key statistics
| Market Cap | $127 billion |
| Price/Earnings | 35 |
| Price/Sales | 9 |
| Price/Book | 19 |
| Enterprise Value | $124 billion |
| Operating Margin | 21% |
| Profit Margin |
27% |
| 52-week high | $164.46 |
| 52-week low | $72.50 |
| Short Interest | 6% |
| Average Wall Street Rating and Price Target | Buy, $142.74 |
Advanced Micro Devices Stock Forecast:
Monday's rally gapped back up to the 9-day moving average. On Tuesday, AMD needs to close above here and make a more strident attempt at the 21-day moving average, which currently sits near $127. Note that Friday's low coincided with the $100 support zone from September and October, which launched the end-of-year rally that pushed AMD stock up 65%.
One source of concern to bulls is that the Moving Average Convergence Divergence (MACD) has failed to narrow or even get close to crossing over. Without a big earnings beat on Tuesday, AMD stock may float in this middle ground before a clear direction appears.
AMD 1-day chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
