Technology

Earnings Previews: Alphabet, AMD, Microsoft

There are 39 analysts covering AMD, and 32 rate the stock a Buy or Strong Buy and another 16 have a Hold rating. At a price of around $120, the stock has outrun its median price target of $115. At the high price target of $150, the upside potential is 25%.

Consensus estimates call for third-quarter revenue of $4.11 billion, up 6.8% sequentially and 47% year over year. Adjusted EPS are expected to improve by 5.3% sequentially and 61% year over year to $0.66. For the full year, the current estimates call for EPS of $2.51, up 94%, on revenue of $15.69 billion, up 61%.

AMD stock trades at 47.8 times expected 2021 EPS, 38.7 times estimated 2022 earnings and 32.1 times estimated 2023 earnings. The stock’s 52-week range is $72.50 to $122.49. AMD does not pay a dividend.

Microsoft

Dow Jones industrial average component Microsoft Corp. (NASDAQ: MSFT) has added more than 44% to its share price over the past 12 months. Microsoft’s market cap of around $2.33 trillion is second only in size to Apple’s. And Apple’s share price rose by “only” 30% in the past year. The company was recently ranked first by Dow Jones among 2,360 publicly traded companies on environment, social and governmental (ESG) issues.

Sentiment for the stock is, as with Alphabet, essentially universal. Of 38 analysts covering the stock, 36 rate the shares a Buy or Strong Buy, and the other two rate the stock at Hold. At a share price of around $307.30, the potential upside based on a median target of $333 is about 8.4%. At the high target of $384, the implied gain is 25%.

For its first quarter of fiscal 2022, revenue is forecast at $44 billion, down 4.7% sequentially and up 7.7% year over year. Adjusted EPS are forecast at $2.08, down 4.2% sequentially and up 14.3% year over year. For the full fiscal year, current consensus estimates call for EPS of $8.83, up 10.8%, on revenue of $191.66 billion, up 14%.

Microsoft stock trades at 34.7 times expected 2022 EPS, 30.3 times estimated 2023 earnings and 26.6 times estimated 2024 earnings. The stock’s 52-week range is $199.62 to $311.09. The company does not pay a dividend.

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