AXT (AXTI) & Advanced Micro Devices (AMD) Critical Review

AXT (NASDAQ: AXTI) and Advanced Micro Devices (NASDAQ:AMD) are both technology companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Valuation & Earnings

This table compares AXT and Advanced Micro Devices’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AXT $81.35 million 4.14 $5.63 million $0.24 36.04
Advanced Micro Devices $4.27 billion 2.36 -$497.00 million ($0.09) -116.22

AXT has higher earnings, but lower revenue than Advanced Micro Devices. Advanced Micro Devices is trading at a lower price-to-earnings ratio than AXT, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for AXT and Advanced Micro Devices, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AXT 0 1 3 0 2.75
Advanced Micro Devices 4 14 10 0 2.21

AXT presently has a consensus target price of $9.94, suggesting a potential upside of 14.88%. Advanced Micro Devices has a consensus target price of $14.39, suggesting a potential upside of 37.58%. Given Advanced Micro Devices’ higher possible upside, analysts clearly believe Advanced Micro Devices is more favorable than AXT.

Volatility & Risk

AXT has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500. Comparatively, Advanced Micro Devices has a beta of 2.46, indicating that its share price is 146% more volatile than the S&P 500.

Profitability

This table compares AXT and Advanced Micro Devices’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AXT 9.96% 5.67% 5.04%
Advanced Micro Devices 4.44% 60.79% 8.42%

Insider & Institutional Ownership

60.4% of AXT shares are held by institutional investors. Comparatively, 60.1% of Advanced Micro Devices shares are held by institutional investors. 6.9% of AXT shares are held by insiders. Comparatively, 1.6% of Advanced Micro Devices shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

AXT beats Advanced Micro Devices on 8 of the 14 factors compared between the two stocks.

AXT Company Profile

AXT, Inc. (AXT) is a developer and producer of compound and single element semiconductor substrates, also known as wafers. The dominant substrates used in producing semiconductor chips and other electronic circuits are made from silicon. The Company is engaged in the design, development, manufacture and distribution of compound semiconductor substrates and sale of materials. The Company provides alternative or specialty materials in the form of substrates or wafers, including compound and single element substrates. Its compound substrates combine indium with phosphorous (InP) or gallium with arsenic (GaAs). Its single element substrates are made from germanium (Ge). The Company uses its Vertical Gradient Freeze (VGF) technique for growing single crystal Indium Phosphide (InP), Gallium Arsenide (GaAs) and Germanium (Ge) ingots used to produce wafers for diverse electronic and optoelectronic device and circuit applications.

Advanced Micro Devices Company Profile

Advanced Micro Devices, Inc. is a global semiconductor company. The Company is engaged in offering x86 microprocessors, as standalone devices or as incorporated into an accelerated processing unit (APU), chipsets, discrete graphics processing units (GPUs) and professional graphics, and server and embedded processors and semi-custom System-on-Chip (SoC) products and technology for game consoles. The Company’s segments include the Computing and Graphics segment, and the Enterprise, Embedded and Semi-Custom segment. The Computing and Graphics segment primarily includes desktop and notebook processors and chipsets, discrete GPUs and professional graphics. The Enterprise, Embedded and Semi-Custom segment primarily includes server and embedded processors, semi-custom SoC products, development services, technology for game consoles and licensing portions of its intellectual property portfolio.

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