Investors are forward-looking. So while the market may be performing poorly this year, those who look further ahead can find bargains today that should be more valuable down the line.
One area where this is playing out is in the tech space. A number of companies are providing lower guidance going forward. But given the selloff in the sector so far this year, shares may be oversold and could move higher on the first sign of a turnaround next year.
That may be why semiconductor company Advanced Micro Devices (AMD) is getting analyst approval now, even amid a sector slowdown.
The company has been impacted by weakening sales, but appears best poised for a rebound with its latest product offerings and industry positioning.
Shares have been cut in half in the past year, even with a 29 percent rise in revenue. That’s taken the stock to 19 times earnings, a discount to where the stock trades on average.
Action to take: Shares are worth accumulating at or under $75 to take advantage of the current market weakness. The stock will likely trade higher on a rebound in the next year.
For traders, the April 2023 $90 calls, last going for about $4.50, can likely deliver high-double-digit returns on a rebound in shares. Traders may want to use down days to add to the position, and take some profits on any big daily jump in shares.
Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.