Advanced Micro Devices Is a Rock-Solid Earnings Bet for Tech Investors

With the fourth-quarter earnings announcement for chipmaker Advanced Micro Devices (NASDAQ:AMD) slated for Jan. 26, there’s intense debate about whether AMD stock will fly or fall.

Advanced Micro Devices (AMD) logo on blue background with Ryzen and Radeon brands

Source: Joseph GTK /

It’s a pivotal time for the AMD stock trading community as the share price has gone sideways for a while. But don’t get me wrong, as the stock price is definitely on a long-term uptrend.

Oftentimes, getting a stock to the next level requires some sort of catalyst. Even if the company is a premier tech firm like Advanced Micro Devices, the bulls just need a shot in the arm sometimes.

Could the upcoming earnings report provide that shot in the arm? There’s no way to know for sure what the outcome of any earnings event will be. Still, the data indicates that AMD stock is worth owning before, during and after the earnings event.

AMD Stock at a Glance

Over the past year, AMD stock has exhibited a distinct pattern. And that pattern is one of lateral moves followed by price surges.

If you truly believe in a company, the last thing you want to do is get bored with a lateral share-price move. This is a normal process in which the bulls must digest their gains and prepare for the next move.

AMD stock offers a textbook example of this process in action. From April through June of last year, the stock seemed trapped as it clung to the $54 level week after week.

Then, suddenly AMD stock shot up to the $82 area within a few weeks. This process started in July and continued in early August.

After that, there was a long period of choppy sideways action until mid-November. That’s when AMD stock promptly moved up to the $93 region and stayed there for a while.

With the AMD stock price staying close to the $93 area throughout December and much of January, traders might get bored. This is no time to stop paying attention, though, as a potential price catalyst is just up ahead.

Difference in Leadership

Having a proactive leader at the helm of a company can make a huge difference when it comes to product quality and earnings potential.

A case in point would be Advanced Micro Devices Chief Executive Lisa Su. She took that position in October of 2014. Under Su’s guidance, the company has made strong strides with its powerful Ryzen PC processors and its Epyc server chips.

The push for innovation under Su’s leadership is as intense today as it has ever been. For instance, Advanced Micro Devices continues to develop CPU’s at small node sizes. (Smaller is better when it comes to node sizes.)

Currently, the company is setting the standard for the industry with chips operating at 7-nanometer scale. Even better, Advanced Micro Devices is developing chips at 5-nanometer scale. It’s just another example of the company’s next-generation equipment getting better and better.

What’s Expected

With such robust technology, it’s hard not to bet on AMD stock as the big earnings announcement approaches.

And thankfully, Wall Street’s expectations aren’t overly ambitious. The analyst community is preparing for Advanced Micro Devices to have earned 47 cents per share during the fourth quarter.

Moreover, Wall Street expects Advanced Micro Devices to post sales of $3.02 billion for that quarter. This number is certainly attainable. For reference, keep in mind that in the previous quarter, the company reported sales of $2.8 billion.

That results beat the expectation of $2.56 billion in sales during that time. Additionally, Advanced Micro Devices’ adjusted earnings of 41 cents per share during that time beat Wall Street’s projection of 35 cents per share.

The Takeaway

There was a nice surprise during the last earnings announcement, and there could easily be another one in store this time around.

And even if you choose to sit on the sidelines during the earnings event, you can still own AMD stock as the company consistently offers next-generation technology.

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.

Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.

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