What Happened:
Shares of computer processor maker AMD (NASDAQ:AMD) fell 5.91% in the after-market session after the company reported first-quarter results that narrowly beat analysts' revenue estimates. EPS also beat. However, free cash flow fell short of expectations, and inventory levels increased. In addition, revenue guidance for the next quarter was below the Consensus estimates. Management added that the company was still dealing with "a mixed demand environment" in which revenue growth is expected to be "flattish" during the rest of the first half of the year. Overall, it was a weaker quarter for the company. Following the results, Bank of America analyst, Vivek Arya downgraded the stock's rating from Buy to Neutral (Hold).
What is the market telling us:
AMD's shares are very volatile and over the last year have had 35 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.
AMD is up 28.9% since the beginning of the year, but at $82.47 per share it is still trading 24.1% below its 52-week high of $108.59 from June 2022. Investors who bought $1,000 worth of AMD's shares 5 years ago would now be looking at an investment worth $7,550.
Is now the time to buy AMD? Access our full analysis of the earnings results here, it's free.