Why was AMD trading lower in Monday’s pre-market session?
Advanced Micro Devices, Inc. (NASDAQ: AMD) was trading down almost 2% in Monday’s pre-market session after the release of a Barclays report in which analyst Blayne Curtis cut the company’s estimates.
The analyst said: “June laptop results missed estimates, but the much weaker second-half outlook is the bigger story. AMD is not immune to the downturn although the company recently reiterated its full year guidance.
Additionally, he asked investors to avoid equities until the end markets for many of his products see price corrections.
Based in California, AMD manufactures computer processors and related technologies. Its offerings include embedded system applications, graphics processors, motherboard chipsets, personal computers, microprocessors, embedded processors and field programmable gate arrays (FPGAs) for servers, among others.
AMD will soon release its second quarter results
The multinational is expected to publish its second quarter results on July 26. Street’s EPS estimate is $1.02, down from $0.63 a year earlier.
AMD expects revenue to be between $6.3 billion and $6.7 billion in the second quarter and adjusted gross margin to be around 54%.
In the first quarter, the company reported earnings of $1.13 per share, beating analysts’ estimate of $0.91 per share. The figure increased by 117.3% year-on-year.
Revenue grew 71% year over year to a record $5.9 billion, and adjusted gross margin was 53%, up 660 basis points. The first quarter figures included results from Xilinx, the acquisition of which was completed on February 14.
Wall Street is cautiously optimistic about AMD
Despite the analyst’s warning bells, the Street is cautiously optimistic about AMD. On TipRanks, the stock has a Moderate Buy consensus rating based on 17 buys and nine holds. AMD’s average price target of $132.27 implies upside potential of 71.16% from current levels.
Hedge funds are very positive
TipRanks’ Hedge Fund Trading Activity Tool shows that sentiment in AMD is currently very positive, as the cumulative change in holdings across the 20 active hedge funds last quarter was an increase of 9.3 million. shares.
Analysts say buy, but Curtis says no to AMD shares
AMD stock has lost more than 47% since the start of the year, due to uncertainty caused by the shortage of semiconductor chips and a drop in demand, which was triggered by the pandemic of COVID-19. Even though analysts are positive about the company and expect chip demand to rise as companies around the world move their operations to the cloud, Curtis warned investors who want to buy the dip.
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