- Stocks of Intel Corporation (NASDAQ: INTC) slumped after it posted its third quarter results on Friday, October 23, reflecting a lowered revenue and operating income.
- Following the news, AMD shares climbed over three per cent on Friday.
- Tech stocks have been in demand amid the pandemic, with the S&P 500 Information Technology climbing over 29 per cent this year.
Tech stocks have been trending in North American markets after Intel Corporation (NASDAQ: INTC) released its third quarter earnings on Friday, October 23. While Intel stocks slid quickly in intraday trading following the news, scrips of its chief rival Advanced Micro Devices Inc (NASDAQ: AMD) registered a noticeable climb.
Tech stocks have been mostly popular in the wake of the coronavirus pandemic, with the S&P 500 Information Technology gaining 29.47 per cent year-to-date (YTD). While the NASDAQ-100 tech index is up over 19 per cent increase this year, the S&P/TSX Capped Information Technology climbed 38.47 per cent YTD.
Here’s a closer look at the trending tech stocks Intel Corporation and AMD, in which Canadian investors have shown interest:
Intel Corporation (NASDAQ: INTC or INTC:US)
Current INTC Stock Price: US$ 48.07
Intel Corporation announced plans on Tuesday, October 20, to sell its NAND memory unit to South Korean company SK Hynix Inc for about US$9 billion. The deal includes Intel’s wafer and solid-state drive businesses and manufacturing unit in China.
The Santa Clara-based tech giant designs and manufactures microprocessors used in computer and data center markets. One of the world's largest chipmakers, Intel has acquired companies such as Altera, Mobileye, Nervana, etc in order to expand beyond computer fields.
INTC STOCK PERFORMANCE
Intel Corporation’s lowered revenue in the latest quarter saw its stocks sink nearly 11 per cent on Friday. The scrips are down 21 per cent year-to-date (YTD) and nearly 17 per cent in the last six months.
The shares plummeted to a low of US$ 44.61 (March 16) when the markets crashed during the pandemic. However, since then, its scrips rebounded nearly eight per cent in the next seven months.
Intel has an average share trading of 25.7 million in the last 10 days.
INTC Q3 2020 QUARTER RESULTS
Although Intel’s third quarter revenue of US$ 18.3 billion exceeded its expectations set in July, the amount was down four per cent year-over-year (YoY). While its data-centric revenue of US$ 8.5 billion dropped 10 per cent YoY, its PC-centric revenue of US$ 9.8 million climbed one per cent YoY in Q3 2020 ending 26 September 2020.
The US$ 204.2-billion market cap company made US$ 25.5 billion cash from operations and US$ 15.1 billion of free cash flow in the latest quarter. It has paid dividends worth US$ 4.2 billion this year.
Intel posted an operating Income of US$ 5.1 billion in Q3 2020, down 22 per cent from US$ 6.4 billion in Q3 2019. Its gross margin was down from 58.9 per cent in Q2 2019 to 53.1 per cent in Q2 2020.
Advanced Micro Devices Inc (NASDAQ:AMD, AMD:US)
Current AMD Stock Price: US$ 86.51
Advanced Micro Devices Inc created quite a buzz earlier in October with the showcase of its next-gen Ryzen 5000 Series desktop central processing units (CPU) containing latest models of Ryzen 5 5600X, Ryzen 9 5900X, Ryzen 7 5800X, and Ryzen 9 5950X. The new CPU models are set to be released in markets worldwide on November 5.
Reports have floated recently regarding AMD acquiring rival tech company Xilinx Inc for approximately US$ 30 billion.
The California-based tech juggernaut produces processors and other electronic parts for computers. It is expected to release its Zen 3 CPUs by the end of 2020.
AMD STOCK PERFORMANCE
Shares of Advanced Micro Devices Inc climbed three per cent during the intraday trading on Friday. It posted a growth of nearly 70 per cent so far this year. The pandemic-triggered market crash saw the AMD stock price slide down to a low of C$ 38.71 in March. Since then, however, it recovered nearly 112 per cent in the following seven month.
AMD scrips climbed nearly 47 per cent in the last six months and about 38 per cent in three months. It currently has a 10-day average share trading volume of 42.2 million.
AMD FINANCIAL RESULTS
Advanced Micro Devices Inc recorded a revenue of US$ 1.93 billion, up 26 per cent YoY, in its second quarter ending 27 June 2020. The chip titan attributed this increase in its revenue to its Ryzen and EPYC processor sales in the quarter.
AMD’s gross margin of 44 per cent was up three percentage points YoY and its operating income amounted to US$ 173 million in Q2 2020.
In its second quarter report, AMD said that it expects a 42 per cent YoY rise in revenue in the third quarter of 2020, financials of which are set to be released on Tuesday, October 27.
Currently, AMD has a market valuation of US$ 96.23 billion. Its debt-to-earnings (D/E) ratio stands at 0.27, its price-to-book (P/B) ratio is 29.06 and a price-to-cash flow (P/CF) ratio is 109.9, as per the data on the TMX group.
Tech stocks have dramatically outpaced most of its peers and the broader market amid the COVID-19 pandemic. The combined effect of the lockdown, stay-at-home economy and the shift towards automation has taken the momentum in IT stocks to a two-decade high.
This rally in tech stocks is likely to continue as the world adapts to the ‘next’ normal.
But the sector is vast, and the market is teeming with shares of specific domains such as e-commerce, gaming, internet of things (IoT), artificial intelligence, virtual reality, cybersecurity, cloud computing, semiconductors and many more.
So, how one should analyze a tech stock? How to get your hands on futuristic, high-growth tech stocks?
With Kalkine you will find answers to those questions, with our in-depth technical reviews and fundamental analysis of organizational, we help investors making the right choices.
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