AMD is showing better results with sales guidance that exceeds performance expectations, and demand for high-performance chips is rapidly increasing.
AMD
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Advanced Micro Devices, Inc. (NASDAQ:AMD) posted strong fourth-quarter financial results that beat expectations.
The chipmaker reported earnings per share of $0.77, exactly in line with analysts' expectations. When it comes to revenue, AMD also performed strongly, with $6.2 billion, which beat consensus estimates of $6.13 billion.
Shares were down 3.7% in early trading Wednesday, but are still off their worst levels of the session.
According to the forecast, AMD expects revenue to be between $5.1 billion and $5.7 billion. This forecast is presented below with a consensus estimate of $5.73 billion.
“We exit Reach well-positioned to deliver strong year-over-year growth at a very exciting time when artificial intelligence is reshaping virtually every segment of the computing market,” said AMD Chairman and CEO Dr. Lisa Su. At a very exciting time that is reshaping the computing market, we are posting record sequential annual revenue and profit growth, driven by record quarterly sales of AMD Instinct GPUs and EPYC CPUs, as well as higher Ryzen processor sales. “It is,” he said.
Data Center segment revenue increased 38% year over year and 43% sequentially to $2.3 billion. This was driven by “strong growth for AMD Instinct GPUs and 4th Gen AMD EPYC CPUs.”
Wells Fargo analysts recommended clients buy the stock after raising their price target for the stock by $25, to $190 per share.
“We are positive on AMD's 2024-2025+ MI300X ramp (currently modeled at Model 2025 at $7.1 billion, up from $3.3 billion previously) and its positioning for a recovery in traditional server CPUs.” Analysts had this to say in a review note following the earnings call.
Similarly, Ross MKM analysts believed the company's data center GPU guidance reflected demand and raised their price target to $190.
“We believe AMD's core data center momentum will continue to drive strength in the stock, and the company has significantly increased its CY24 AMD GPU guidance, reflecting accelerating customer adoption.”
Elsewhere, Northland Capital, which recently downgraded the stock, upgraded the stock back to Outperform due to weaker sales related to earnings.
“While we would not prefer to downgrade and upgrade a stock at a fairly early date, weak demand for products other than AI products and high expectations for AI chips left us with no other alternative,” the analysts noted. I did. “We expect demand for non-AI products to improve throughout the year, and based on AMD's strong execution, we still see some upside to our AI forecast. We reset our price target at $195. ."