AMD Stock: Don’t Buy Into It in Q4

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

AMD – Semiconductor company Advanced Micro Devices (AMD) slashed its revenue guidance for the upcoming quarter in the face of declining chip demand. The stock has lost more than 60% in 2022. Moreover, its bottom line has declined significantly. So, it could be best to avoid AMD this year. Keep reading….

Semiconductor company Advanced Micro Devices, Inc. (AMD) recently announced its collaboration with the Energy Sciences Network on the launch of ESnet6, the newest generation of the U.S. Department of Energy’s high-performance network dedicated to science.

However, amid escalating macro headwinds, chip demand has been slowing, which could hurt AMD’s revenues. On October 6, 2022, AMD slashed its revenue guidance for the third quarter. The company expects approximately $5.60 billion in sales, about $1.10 billion less than earlier estimates.

AMD has lost 25.5% over the past month to close the last trading session at $57.23. It has lost 60.2% year-to-date and 50.8% over the past year.

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

Bleak Bottom Line

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.

Mixed Valuations

AMD’s forward EV/EBITDA of 11.21x is 3.33% lower than the industry average of 11.60x. Its forward Price/Book of 1.62x is 55.8% lower than the industry average of 3.66x.

However, AMD’s forward EV/Sales of 3.81x is 50.5% higher than the industry average of 2.53x. Its forward Price/Sales of 3.88x is 61.1% higher than the industry average of 2.41x. Moreover, its forward P/E of 29.36x is 46.9% higher than the industry average of 20.00x.

Poor Momentum

AMD is trading below its 50-day moving average of $77.70 and its 200-day moving average of $96.47. In addition, it’s currently trading near its 52-week low of $54.57, which it hit on October 13, 2022.

POWR Ratings Reflect Bleak Prospects

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

AMD has a C grade for Growth and Value, consistent with its mixed financials in the last reported quarter and mixed valuation multiples, respectively.

In addition, it has a D grade for Stability, in sync with its beta of 2.05.

In the 93-stock Semiconductor & Wireless Chip industry, AMD is ranked #87.

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

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

Bottom Line

AMD’s bottom line has declined significantly. Moreover, analysts expect its EPS to decrease 6.8% year-over-year to $0.68 for the quarter ended September 2022, while it is expected to fall 14.1% year-over-year to $0.79 for the quarter ending December 2022. Given AMD’s grim outlook and poor momentum, I think AMD might be best avoided.

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 Renesas Electronics Corporation (RNECF), which have an overall A (Strong Buy) rating, and Photronics, Inc. (PLAB), which has an overall B (Buy) rating.

Want More Great Investing Ideas?

3 Stocks to DOUBLE This Year


AMD shares were trading at $57.60 per share on Thursday afternoon, up $0.37 (+0.65%). Year-to-date, AMD has declined -59.97%, versus a -22.29% 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
RNECFGet RatingGet RatingGet Rating
PLABGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Investors: Are You Ready for November?

The S&P 500 (SPY) tumbled to end October. Is that a harbinger of more downside to come? Or will the bull market return with gusto? Investment pro Steve Reitmeister shares his time market views including a preview of his favorite stocks. Get the full story below...

3 Cybersecurity Stocks Defending Against Digital Threats

The demand for cybersecurity solutions is rising as digital threats and sophisticated cyberattacks continue to escalate. Therefore, it might be wise to keep track of cybersecurity stocks, CrowdStrike (CRWD), Palo Alto Networks (PANW), and Fortinet (FTNT), as they offer innovative solutions presenting further growth opportunities. Continue reading...

3 Oil Stocks With High Upside as Global Demand Rebounds

The outlook for oil demand growth appears promising despite economic uncertainties and worldwide supply deficit. Amid this, investing in quality oil stocks Enterprise Products Partners (EPD), Marathon Oil (MRO), and Plains All American Pipeline (PAA) could be ideal as global demand rebounds. Read more...

3 Tech Stocks Under $10 That Could Deliver Big Gains

The technology industry is booming, driven by breakthroughs and significant government investments. Thus, incorporating affordable tech stocks, Sprinklr (CXM), Sabre Corporation (SABR), and Cricut (CRCT) into your portfolio provides an accessible entry point to capitalize on the industry’s growth. Read more…

2 Concerns for Investors in October

The S&P 500 (SPY) may be touching all time highs...but recent action points to concerns on 2 fronts: inflation and earnings. Investment veteran Steve Reitmeister shares his views on these 2 timely topics along with a preview of his top 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