AMD Fell 6.4% In A Day. What To Do Now?.
Advanced Micro Devices (AMD) stock is down 6.4% in a day. The stock still looks expensive which, combined with history of only modest recovery post dips, suggests some risk. Consider the following data:
- A $264 Bil company with $28 Bil in revenue currently trading at $163.12.
- Last 12 month revenue growth of 21.7% and operating margin of 10.3%.
- Has Debt to Equity ratio of 0.0 and Cash to Assets ratio of 0.1
- Currently trading at P/E multiple of 118.7 and P/EBIT multiple of 93.1
- Has returned (median) 1.4% within a year following sharp dips since 2010. See AMD Dip Buy Analysis.
While we like to buy dips if the fundamentals check out – for AMD, see Buy or Sell AMD Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and AMD drops another 20-30% to $114.18 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.
Below is a deep dive into Advanced Micro Devices (AMD) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns.
AMD produces x86 microprocessors, GPUs, chipsets, and development services across computing, graphics, enterprise, embedded, and semi-custom segments.
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2022 Inflation Shock
- AMD stock fell 65.4% from a high of $161.91 on 29 November 2021 to $55.94 on 14 October 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 18 January 2024
- Since then, the stock increased to a high of $211.38 on 7 March 2024 , and currently trades at $163.12
| AMD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -65.4% | -25.4% |
| Time to Full Recovery | 461 days | 464 days |
2020 Covid Pandemic
- AMD stock fell 34.3% from a high of $58.90 on 19 February 2020 to $38.71 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 22 July 2020
| AMD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -34.3% | -33.9% |
| Time to Full Recovery | 128 days | 148 days |
2018 Correction
- AMD stock fell 49.1% from a high of $32.72 on 14 September 2018 to $16.65 on 24 December 2018 vs. a peak-to-trough decline of 19.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 10 June 2019
| AMD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -49.1% | -19.8% |
| Time to Full Recovery | 168 days | 120 days |
2008 Global Financial Crisis
- AMD stock fell 91.2% from a high of $20.35 on 1 January 2007 to $1.80 on 25 November 2008 vs. a peak-to-trough decline of 56.8% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 21 August 2018
| AMD | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -91.2% | -56.8% |
| Time to Full Recovery | 3556 days | 1480 days |
Worried that AMD could fall much more? You could take a look at the Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.