Time to Buy AMD Stock? Not so Fast...

NASDAQ: AMD | Advanced Micro Devices Inc. News, Ratings, and Charts

AMD – Following the Biden administration’s new chip export restrictions and deteriorating investor sentiment, Advanced Micro Devices (AMD) has declined significantly, hitting its 52-week low in recent trades. Given its weak bottom-line performance in the last reported quarter, it might not be wise to invest in the stock just yet. Read on….

Amid escalating geo-political tensions, the Biden administration has decided to implement new restrictions on U.S. exports of semiconductor chips and chipmaking equipment to China. According to Advanced Micro Devices, Inc. (AMD), new license requirements prevent the shipment of its MI250 chips to China. While the company doesn’t see any consequent material impact, the stock has hit its 52-week low in recent trades on deteriorating investor sentiment.

Moreover, AMD lost 25.1% over the past month and 51.7% year-to-date to close the last trading session at $68.43. However, it might not be wise to scope up AMD shares right now, as it may not have bottomed out yet.

Here is what could shape AMD’s performance in the near term:

Bleak Bottom Line Performance

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

Stretched Valuations

In terms of its forward EV/S, AMD’s 4.48x is 80.4% higher than the industry average of 2.48x. Its forward EV/EBITDA of 12.86x is 8.1% higher than the industry average of 11.90x. Also, its forward P/S of 4.28x is 75.9% higher than the industry average of 2.43x. In addition, its forward Price/Cash Flow of 16.84x is 4.2% higher than the industry average of 16.15x.  

Trading Below Moving Averages

AMD is trading below its 50-day moving average of $88.77 and its 200-day moving average of $104.16, indicating a downtrend.

POWR Ratings Reflect Bleak Prospects

AMD has an overall rating of D, equating to Sell in our proprietary POWR Rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree. 

Our proprietary rating system also evaluates each stock based on eight distinct categories. AMD has a C grade for Growth, consistent with its mixed financials in the last reported quarter.

In addition, it has a D grade for Stability, in sync with its beta of 1.97.

In the 93-stock Semiconductor & Wireless Chip industry, AMD is ranked #84. 

Click here for the additional POWR Ratings for AMD (Value, Momentum, Sentiment, and Quality).

View all the top stocks in the Semiconductor & Wireless Chip industry here.

Bottom Line

AMD has been hitting its 52-week low recently, indicating declining investor sentiment. Moreover, given the lingering supply chain issues and declining demand, the semiconductor market is expected to decline by 6% in 2023. This, along with the new chip exporting restrictions, could lead to AMD losing further. So, it may not be wise to scope up its shares now.

How Does Advanced Micro Devices, Inc. (AMD) Stack Up Against its Peers? 

While AMD has an overall POWR Rating of D, one might consider looking at its industry peers, STMicroelectronics N.V. (STM), Xperi Holding Corporation (XPER), and Broadcom Inc. (AVGO), which have an overall A (Strong Buy) rating, and United Microelectronics Corporation (UMC), which has an overall B (Buy) rating.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


AMD shares were trading at $68.39 per share on Friday afternoon, down $1.11 (-1.60%). Year-to-date, AMD has declined -52.47%, versus a -21.64% rise in the benchmark S&P 500 index during the same period.


About the Author: Riddhima Chakraborty


Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
AMDGet RatingGet RatingGet Rating
STMGet RatingGet RatingGet Rating
XPERGet RatingGet RatingGet Rating
AVGOGet RatingGet RatingGet Rating
UMCGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


What Happens After 6,000 for Stocks?

The S&P 500 (SPY) has the petal to the medal after the election and 2nd Fed rate cut. However, stocks are now pressed up against serious resistance at 6,000 which begs the question of what happens next? Investment pro Steve Reitmeister shares his timely market views including a preview of his top 10 stocks. Get the full story below...

3 Streaming Stocks Benefiting from Cord-Cutting Trends

As streaming continues to dominate the digital entertainment landscape, the global streaming market presents a lucrative investment opportunity. So, it could be ideal to invest in fundamentally solid streaming stocks Netflix (NFLX), Walt Disney (DIS), and Roku (ROKU). Read further...

3 Gold Stocks to Buy as Safe-Haven Demand Grows

Gold is a stable investment now due to its role as a safe-haven asset during economic uncertainty, rising demand, industrial use, and growth, bolstered by central bank purchases and interest rate cuts. Therefore, investors should consider investing in top gold stocks such as Newmont (NEM), Barrick Gold (GOLD), and Agnico Eagle Mines (AEM). Read more...

3 AI Stocks Transforming Industries and Driving Future Growth

With rapid digitalization, rapid adoption, and development, as well as surging demand, the AI market is on the rise. Amid this backdrop, investors could buy fundamentally solid AI stocks NVIDIA Corporation (NVDA), Microsoft (MSFT), and Meta Platforms (META) poised for substantial gains. Continue reading...

Stock Investing AFTER the Election

The S&P 500 (SPY) has been stuck under the highs awaiting the election results. The biggest mystery is how soon results will be finalized. The second biggest concern is what the Fed will do at their 11/7 meeting. Steve Reitmeister shares his views on these things along with fresh market outlook and preview of his top 10 stocks to buy now.

Read More Stories

More Advanced Micro Devices Inc. (AMD) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All AMD News