AMD stock jumps on better-than-expected outlook, AI sales
Advanced Micro Devices, Inc. (NASDAQ:) posted a second-quarter earnings win with a slight beat on analyst expectations. AMD stock rose more than 9% in premarket trading Wednesday.
The chipmaker reported adjusted earnings per share (EPS) of $0.69, just above the $0.68 consensus. The company’s revenue also exceeded forecasts, coming in at $5.84 billion against the predicted $5.72 billion.
This performance represents a strong showing in a competitive semiconductor market, with the company attributing its success to robust demand in its Data Center and Client segments.
AMD’s Chair and CEO, Dr. Lisa Su, highlighted the company’s revenue and earnings growth, crediting record Data Center segment revenue and the acceleration of their AI business.
“The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business,” Dr. Su stated.
The company’s financial outlook for the third quarter of 2024 is also promising, with revenue guidance set at $6.7 billion, plus or minus $300 million. This forecast surpasses the analyst consensus of $6.61 billion, signaling confidence in continued demand for AMD’s products, particularly its Instinct, EPYC, and Ryzen processors.
Moreover, the chipmaker also hiked its full-year MI300 outlook to $4.5 billion from $4.0 billion prior.
“We’re encouraged by these strong results and are fine-tuning estimates,” KeyBanc Capital Markets analysts said in a post-earnings note, reiterating an Overweight rating on AMD stock.
Similarly, Mizuho analysts said they “see AMD still in the early innings of its AI GPU ramp, and well positioned to gain share.” The investment bank also adjusted EPS estimates and trimmed its price target on the stock from $215 to $195.
AMD’s CFO, Jean Hu, echoed the sentiment of strong execution in the second quarter, emphasizing the company’s revenue growth and gross margin expansion.
“We delivered solid earnings growth, while increasing our strategic AI investments to build the foundation for future growth,” Hu commented.
