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Is AMD Stock a Buy or Sell at These Prices?

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On Wednesday, Advanced Micro Devices (NYSE:AMD) stock gained 0.1% and closed at $54.99 with a market cap of $64.4 billion. The Dow Jones Industrial Average fell by 445 points or 1.9%. Meanwhile, the S&P 500 and the Nasdaq Composite lost about 2.2% and 1.4%, respectively. The broader markets fell amid uncertainty related to the coronavirus outbreak. To learn more, read US Stock Markets Rally Even as Economic Crisis Deepens.

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AMD’s stock price has risen by 15.6% in the trailing five-day period, while it has risen by 101.2% in the trailing 12-month period. The stock is trading 7.2% below its 52-week high of $59.27 on February 19, 2020. The stock is also trading 111.3% above its 52-week low of $26.03 on May 23, 2019. On a YTD (year-to-date) basis, the stock has risen 19.9% as of Wednesday.

Meanwhile, Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC) have gained 52.1% and 4.6%, respectively, in the last 12 months. Micron Technology (NASDAQ:MU), Qualcomm, and Broadcom (NASDAQ:AVGO) have returned 11.0%, 32.9%, and -18.6%, respectively.

Analysts’ recommendations for AMD stock

As of Wednesday, 39 analysts cover AMD stock. Among the analysts, 20 recommend a “hold,” 18 recommend a “buy,” and one recommends a “sell.” Analysts have an average target price of $50.87 on AMD. The target price implies a return of -7.5% based on the closing price of $54.99 on Wednesday. The consensus target price for the stock has risen from $50.34 in March—a rise of 1.1%.

On Wednesday, Bank of America Global Research increased its target price from $60 to $62.

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Mad Money host Jim Cramer thinks that AMD and Nvidia stocks are worth buying, as reported by CNBC. During the program’s lightning round yesterday, Cramer said, “Nvidia and Advanced Micro Devices: These new games require powerful hardware. Nvidia and AMD make the best graphics chips. Both stocks have been roaring.”

Intel, Micron Technology, and Nvidia have average broker target prices of $63.10, $61.72, and $296.09, respectively. These figures imply returns of 7.2%, 32.9%, and 5.4%, respectively, over the next 12 months.

Analysts’ expectations for Q1 2020

AMD will report its first-quarter earnings results on April 28. Analysts expect the company to report revenue of $1.79 billion in the first quarter of 2020—a rise of 41.0% from $1.27 billion in the same quarter the previous year. Analysts also expect that AMD will report an adjusted EPS of $0.18 during the quarter compared to $0.06 in the same quarter in 2019.

Currently, analysts expect a 28.0% and 20.4% rise in AMD’s 2020 and 2021 revenues, respectively. Analysts also expect an adjusted EPS of $1.11 and $1.59 in 2020 and 2021, respectively.

AMD’s stock performance

AMD stock closed 19.2% above its 20-day moving average of $46.12 on Wednesday. However, the stock was 15.1% and 18.6% above its 50-day and 100-day moving averages of $47.79 and $46.36, respectively. The company’s 14-day MACD is 5.67, which indicates an upward trading trend. With a 14-day relative strength index score of 65, the stock is near the overbought level.

AMD has an upper Bollinger Band level of $54.79. The company’s middle Bollinger Band level is $46.12, while its lower Bollinger Band level is $37.44. On Wednesday, AMD stock closed near its upper Bollinger Band level, which also indicates that the stock is overbought.

Currently, AMD stock is trading at 49.60x its 2020 estimated adjusted EPS of $1.11. The stock is trading at 34.58x its 2021 estimated adjusted EPS of $1.59. Wall Street analysts expect AMD’s earnings to grow at a CAGR of 35.4% over the next five years.

AMD stock rose by 1.3% in the pre-market trading session today at 7:41 AM ET. US chip stocks rose after Taiwan Semiconductor Manufacturing Company’s first-quarter profit nearly doubled.

Read AMD Stock Rose over 11%: Will the Rally Continue? and Is AMD Stock a Good Option for Investors Right Now? to learn more. You can also read AMD Stock Got a Downgrade: Is There Limited Upside? for more information.

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