Investors have enjoyed a strong rally over the past week, and the Nasdaq Composite (^IXIC 2.02%) has been a big beneficiary of the rebound in the stock market. The Nasdaq has picked up almost 10% from its lows from earlier this month, even though futures contracts on the tech-heavy index eased slightly lower early Monday morning.
Some high-profile stocks have led the charge higher for the Nasdaq, and Advanced Micro Devices (AMD 2.37%) was on the move again to start the new week. Yet seeing even bigger gains was the aptly named Monday.com (MNDY 2.81%), which announced its latest financial results and confirmed the steep trajectory of its recent growth.
AMD keeps chipping away
Shares of Advanced Micro Devices were up another 3% in premarket trading on Monday, adding to gains of nearly 6% in Friday's trading session. AMD has seen its stock struggle throughout much of 2022 along with the rest of the semiconductor industry, but analysts on Wall Street seem to have an increasingly favorable view toward a potential rebound for the chipmaker.
AMD received not one but two analyst upgrades over the weekend. UBS Group boosted its rating on the semiconductor stock from neutral to buy, and it raised its price target on AMD shares by $20 to $95 per share. UBS argued that much of the pressure on AMD throughout the year has come from a poor demand picture from the PC market, especially given that pandemic-spurred panic buying among consumers in 2020 and 2021 has given way to more normal conditions in the industry. However, analysts believe that having worked down their inventory levels, PC manufacturers are likely to start replenishing supplies of chips, which should work in AMD's favor.
Meanwhile, analysts at Baird see even better times ahead for Advanced Micro Devices. Baird upgraded AMD stock from neutral to outperform, and it boosted its price target by $35 per share to a new level of $100. From Baird's point of view, AMD's strength in the data center market could prove to be the catalyst for greater market share, continuing favorable trends that the company has experienced over the longer run.
Investors were already primed for a recovery in AMD stock, sending shares higher even as its most recent quarterly results proved somewhat disappointing. Yet with the share price still down by more than half from its levels in late 2021, hopes for a rebound in the business are helping shareholders back off their most pessimistic views.
No Monday blues for Monday.com
Yet much larger gains came for Monday.com. The enterprise software company's shares were up nearly 20% in premarket trading after it announced third-quarter financial results that demonstrate its resilience in the face of weakening macroeconomic conditions.
Monday's numbers were impressive. Revenue of $137 million was up 65% year over year, with strong adoption of the company's Work OS operating system contributing to its growth rate. Monday expanded its high-value customer base of enterprise clients generating more than $50,000 in annual recurring revenue to over 1,300, and it has driven its growth both by landing new customers and by expanding its relationships with its existing clients. Even better, Monday eked out a modest profit for the period, with adjusted earnings of $0.05 per share reversing a year-ago loss of $0.26 per share.
Investors weren't surprised to see Monday guide for slightly slower growth in the coming quarter. The software-as-a-service (SaaS) stock's fourth-quarter projections for between $140 million and $142 million in revenue imply a growth rate of 47% to 49%, but that would help Monday finish 2022 with gains of 65% to 66% over 2021's numbers.
The workplace collaboration tools that Monday offers have proven useful in boosting efficiency. That could become even more important as clients tighten their belts in anticipation of tough economic times and shareholders look forward to a longer-term bounce for the hard-hit stock.
