Thanks to markets trading at all-time highs and Micron (NASDAQ:MU) reporting strong results, Advanced Micro Devices (NASDAQ:AMD) broke out on the markets last week. Average trading volume is still strong. What happens next depends on the company’s next quarterly earnings report.
AMD will report quarterly results in late January (estimated date: Jan. 28 after market close). After EPS grew by 127% this year, any upside forecast above the 77.6% EPS growth in 2020 could send the stock higher.
When Micron reported results last week, the stock broke out of the $45 - $47 range and closed at $55. MU’s forward P/E is now 10.4 times.
Applied Materials (NASDAQ:AMAT) reported results on Nov. 14 that beat expectations. It also raised its Q1 forecast with revenue expectations of $4.1 billion plus or minus $150 million. EPS is in the range of $0.87 - $0.95. AMAT stock trades at a forward P/E of 14 times.
AMD is a special case with a forward P/E of 40 times. This is above Nvidia’s (NASDAQ:NVDA) 33 times. Still, AMD’s product refresh across the board suggests accelerated market share growth ahead. EPYC on the server market will result in market share loss for Intel (NASDAQ:INTC).
AMD may add a few points in market share in the desktop CPU market after the Ryzen refresh. In the near-term, Intel’s dominance in the OEM market, through PC sales at Dell and HP Inc., will limit AMD’s revenue growth.
Continue holding AMD stock as the uptrend holds.
