Its worth taking a closer look at the latest news about chip stock Advanced Micro Devices, Inc (NYSE: AMD) from the past few weeks as the company is set to report earnings on Thursday after the market closes plus take a look at the stock's performance verses that of other chip stocks like Intel Corporation (NASDAQ: INTC) and NVIDIA Corporation (NASDAQ: NVDA). I should mention that we had an open position in Advanced Micro Devices in our SmallCap Network Elite Opportunity (SCN EO) portfolio from last summer up until late January when we locked in a small loss. Since our SCN EO is a trading portfolio rather than a long term buy and hold portfolio, we got out as AMD shares sank yet again after the company reported earnings (something that also happened after the last three previous earnings reports). However, we have recently got back into Advanced Micro Devices because the company continues to perform well with the technological advances and changes occurring – especially in the gaming space, they should be well positioned for forward growth in the quarters ahead. With that in mind, here is a quick look at some important recent news about AMD before it reports earnings next week:
Back-to-School Technology Usage Survey. On Thursday, Advanced Micro Devices announced the results of its national Back-to-School Technology Usage Survey of college-bound students about their technology preferences and purchase habits. The survey revealed that laptops are the device of choice among US college students aged 18 to 26 with 85% owning one, outnumbering smartphone owners and more than double the reported number of tablet owners. When asked to rank various items in order of importance, 41% of students said their laptop was their most important possession followed by their car, tablet, bicycle and television. Interestingly enough, only 1% prioritize their television as 73% report that they use other devices more than a TV (including laptops) to watch television shows and videos. More than half of students surveyed also plan to buy new technology before heading back to college in the fall and one third said having a new laptop at the top of their list, beating out tablets and 2-in-1s as their computing form factor of choice. Pacific Crest Downgrads AMD and NVDA. In June, shares of Advanced Micro Devices and Nvidia were falling after research firm Pacific Crest downgraded the stocks, saying that they will be hurt by weak PC sales. Specifically, Pacific Crest analyst Michael McConnell said that the number of computers sold is likely to drop 5%-10% next quarter due to weak consumer demand and excess inventory. About 45% of AMD's chips are incorporated into consumer desktops, while less than 5% of them are used in corporate PCs. In addition, notebook manufacturers had reported that AMD is losing share to Intel in notebooks that cost less than $399. Hence, McConnell downgraded AMD and Nvidia to Underperform from Sector Perform and kept a $35 price target and Outperform rating on Intel. He also stated that Nvidia is better positioned as it has less exposure to desktop PCs and benefits more from strong corporate PC demand than AMD. Share Performance. Advanced Micro Devices is up 11.4% since the start of the year, up 5.4% over the past year and up 22.9% over the past five years. Here is a look at Advanced Micro Devices' performance verses that of Intel Corporation and NVIDIA Corporation:
Finally, here are the latest technical charts for chip stocks Advanced Micro Devices, Intel Corporation and NVIDIA Corporation:
SmallCap Network Elite Opportunity (SCN EO) has an open position in AMD. To find out what other open positions SCN EO currently has, and to learn why so many traders and investors are relying on this premium subscription service, click here to find out more.
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