Be Bullish on Advanced Micro Devices After Across-the-Board Earnings Beats

Stocks to buy
  • Some Advanced Micro Devices (AMD) investors have been nervous about tech component supply chain problems this year.
  • However, there’s data showing AMD’s outstanding progress despite the challenges.
  • Investors should consider holding AMD stock as the company continues to generate robust revenue.
Sign of AMD office in Markham, Ontario, Canada. Advanced Micro Devices, Inc. (AMD) is an American multinational semiconductor company.

Source: JHVEPhoto / Shutterstock.com

Macro-level problems come and go, and Advanced Micro Devices (NASDAQ:AMD) always weathers the storms. Some folks may be hesitant to hold AMD stock in 2022, but they should check the data and consider staying in the trade.

Advanced Micro Devices (AMD) has been a semiconductor manufacturing giant for so long, it’s easy to take the company for granted. Indeed, it’s only when problems occur that some people take the time to think about AMD’s crucial role in the technology sector.

As global supply chains have become constrained, the AMD share price has come under negative pressure. This, however, is only a buying opportunity since AMD is still capable of delivering blockbuster top- and bottom-lines.

AMD Advanced Micro Devices $101.20

What’s Happening with AMD Stock?

AMD stock topped out late last year at $164.46. More recently, it has traded in the $80s and $90s. As a result, Advanced Micro Devices’ trailing 12-month price-to-earnings (P/E) ratio has come down to a very reasonable 32.8x.

That’s a good value, but there will always be skeptics. Without a doubt, the bears were watching closely when AMD released its first-quarter 2022 results recently.

The stakes were high because people view AMD as a bellwether in the microchip industry. Thankfully, the company delivered blockbuster results.

No matter how you slice it, Advanced Micro Devices came through with outstanding data. To start with, the company generated $5.9 billion in revenue, up 71% year-over-year (YOY). Furthermore, it posted gross profit of $2.8 billion, representing an eye-opening 78% YOY increase.

A Significant Inflection Point

Turning to the bottom line, Advanced Micro Devices’ non-GAAP Q1 2022 earnings of $1.13 per share exceeded the analyst consensus estimate of 91 cents per share. This result signifies a whopping 117% improvement over the 52 cents per share from the year-earlier quarter.

Perhaps most encouraging of all, though, is AMD’s optimistic revenue forecast. Specifically, the company expects to generate revenue of around $6.5 billion (plus or minus $200 million) during 2022’s second quarter. This would represent an increase of roughly 69% YOY, and also exceeds the average Wall Street analyst estimate of $6.03 billion.

Chair and CEO Dr. Lisa Su emphasized Advanced Micro Devices’ across-the-board strong quarterly results. “Each of our businesses grew by a significant double digit percentage year-over-year,” Su observed.

Su further suggested that her company’s first quarter of the year “marked a significant inflection point in our journey to scale and transform AMD.”

What You Can Do Now With AMD Stock

You don’t have to let macro-level concerns shake you out of an AMD stock position. Clearly, the company is demonstrating improvement during these challenging times.

With the Advanced Micro Devices share price below its peak, you might choose to seize the opportunity and buy the stock. There will always be problems to deal with, but time and again, AMD stock will overcome them in the long run.

On the date of publication, Louis Navellier had a long position in AMD.  Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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