Reviewing International Business Machines (NYSE:IBM) & Advanced Micro Devices (NASDAQ:AMD)

International Business Machines (NYSE:IBM) and Advanced Micro Devices (NASDAQ:AMD) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, valuation, profitability and analyst recommendations.

Earnings & Valuation

This table compares International Business Machines and Advanced Micro Devices”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
International Business Machines	$62.75 billion	4.32	$6.02 billion	$5.81	50.20
Advanced Micro Devices	$27.75 billion	8.06	$1.64 billion	$1.36	101.42

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for International Business Machines and Advanced Micro Devices, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
International Business Machines	1	8	8	1	2.50
Advanced Micro Devices	1	11	22	4	2.76

International Business Machines presently has a consensus target price of $257.50, suggesting a potential downside of 11.71%. Advanced Micro Devices has a consensus target price of $138.74, suggesting a potential upside of 0.59%. Given Advanced Micro Devices’ stronger consensus rating and higher possible upside, analysts clearly believe Advanced Micro Devices is more favorable than International Business Machines.

Institutional and Insider Ownership

59.0% of International Business Machines shares are held by institutional investors. Comparatively, 71.3% of Advanced Micro Devices shares are held by institutional investors. 0.2% of International Business Machines shares are held by insiders. Comparatively, 0.1% 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.

Risk & Volatility

International Business Machines has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500. Comparatively, Advanced Micro Devices has a beta of 2.05, meaning that its stock price is 105% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
International Business Machines	8.71%	37.43%	7.00%
Advanced Micro Devices	8.03%	8.30%	6.83%

Summary

Advanced Micro Devices beats International Business Machines on 8 of the 15 factors compared between the two stocks.

About International Business Machines

International Business Machines Corporation, together with its subsidiaries, provides integrated solutions and services worldwide. The company operates through Software, Consulting, Infrastructure, and Financing segments. The Software segment offers a hybrid cloud and AI platforms that allows clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on skills integration for strategy, experience, technology, and operations by domain and industry. The Infrastructure segment provides on-premises and cloud based server, and storage solutions, as well as life-cycle services for hybrid cloud infrastructure deployment. The Financing segment offers client and commercial financing, facilitates IBM clients’ acquisition of hardware, software, and services. The company has a strategic partnership to various companies including hyperscalers, service providers, global system integrators, and software and hardware vendors that includes Adobe, Amazon Web services, Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, and others. The company was formerly known as Computing-Tabulating-Recording Co. International Business Machines Corporation was incorporated in 1911 and is headquartered in Armonk, New York.

About Advanced Micro Devices

Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. It operates through Data Center, Client, Gaming, and Embedded segments. The company offers x86 microprocessors and graphics processing units (GPUs) as an accelerated processing unit, chipsets, data center, and professional GPUs; and embedded processors, and semi-custom system-on-chip (SoC) products, microprocessor and SoC development services and technology, data processing unites, field programmable gate arrays (FPGA), and adaptive SoC products. It provides processors under the AMD Ryzen, AMD Ryzen PRO, Ryzen Threadripper, Ryzen Threadripper PRO, AMD Athlon, AMD Athlon PRO, and AMD PRO A-Series brand names; graphics under the AMD Radeon graphics and AMD Embedded Radeon graphics; and professional graphics under the AMD Radeon Pro graphics brand name. In addition, the company offers data center graphics under the Radeon Instinct and Radeon PRO V-series brands, as well as servers under the AMD Instinct accelerators brand; server microprocessors under the AMD EPYC brands; low power solutions under the AMD Athlon, AMD Geode, AMD Ryzen, AMD EPYC, AMD R-Series, and G-Series brands; FPGA products under the Virtex-6, Virtex-7, Virtex UltraScale+, Kintex-7, Kintex UltraScale, Kintex UltraScale+, Artix-7, Artix UltraScale+, Spartan-6, and Spartan-7 brands; adaptive SOCs under the Zynq-7000, Zynq UltraScale+ MPSoC, Zynq UltraScale+ RFSoCs, Versal HBM, Versal Premium, Versal Prime, Versal AI Core, Versal AI Edge, Vitis, and Vivado brands; and compute and network acceleration board products under the Alveo brand. It serves original equipment and design manufacturers, public cloud service providers, system integrators, independent distributors, and add-in-board manufacturers through its direct sales force, and sales representatives. Advanced Micro Devices, Inc. was incorporated in 1969 and is headquartered in Santa Clara, California.