AMD: Facts You Should Know Before You Invest

Media reports and rumors about major changes in a company's business outlook usually influence trends in the company's stock price and lead to immediate price fluctuations, but there are always specific basic factors that ultimately encourage buying and selling decisions.

Basically, sell-side analysts who cover stocks pay attention to how earnings forecasts are being revised to reflect the impact of the latest business trends. If a company's profit forecast rises, so does the fair value of its stock. If the fair value is higher than the current market price, investors will be interested in buying shares, and the stock price will rise. This is the reason empirical research shows that there is a strong correlation between revised earnings forecasts and short-term stock price fluctuations.

The consensus earnings forecast for the current fiscal year is $3.42, showing a change of +29.1% compared to the previous year. This forecast has changed -0.5% over the past 30 days.

For the next fiscal year, the consensus revenue forecast is $5.18, which shows a +51.3% change from the amount Advanced Micro was expected to report a year ago. Over the past month, the forecast has changed +2.3%.

Earnings growth can be said to be the best indicator of a company's financial status, but if a company is unable to increase profits, nothing happens. At the end of the day, it is almost impossible for a company to increase profits over a long period of time without increasing profits. Therefore, it is important to know a company's potential profit growth.

In the case of Advanced Micro, the sales consensus forecast for the current quarter is 5.71 billion dollars, showing a change of +6.6% compared to the previous year. For the current fiscal year and the next fiscal year, the projections of $25.29 billion and $31.71 billion are respectively +11.5% and +25.4% It shows changes.

Over the past four quarters, Advanced Micro has surpassed consensus expectations three times in EPS. During this period, the company exceeded consensus earnings forecasts each time.