Advanced Micro Devices (NASDAQ: AMD) stock set the market ablaze in 2023 with terrific gains of 78% so far this year, but it remains to be seen if the chipmaker's terrific run can continue following its latest quarterly results.
AMD released better-than-expected results for the second quarter of 2023, though a closer look indicates that the company is struggling under the impact of weak personal computer (PC) sales. Also, AMD's muted guidance indicates that it isn't out of the woods yet. Still, investors gave AMD's results a thumbs-up, and the stock jumped.
However, AMD's growth isn't strong enough to justify its lofty valuation. The tech stock is trading at 8.5 times sales, which is well above the S 500's price-to-sales ratio of 2.6. So AMD needs to significantly accelerate its growth to justify the expensive valuation, and analysts think the company could deliver the same.
Source Fool.com