AMD Q4 Earnings Outlook Shows Strength Amid AI Uncertainty
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 19h ago
0mins
Should l Buy AMD?
Source: seekingalpha
- Positive Earnings Outlook: AMD is expected to report strong performance in its traditional products on February 3, with Wedbush analysts predicting the company will modestly exceed Q4 estimates due to robust demand for PC and server computing, providing room for both sales and margin upside.
- Rising Server CPU Prices: With server CPU prices projected to rise by double digits, AMD has more time to optimize its product mix, creating a solid foundation for future sales growth, especially in the tight market environment entering Q1.
- Uncertainty in AI Products: While Bryson remains optimistic about AMD's competitiveness in the AI sector, he notes that potential slippage in AI products could impact overall growth, particularly within the current high-margin product set.
- Demand Potential from China: Bryson highlights that China appears on track to green-light some AI-related shipments, which could provide AMD with incremental demand, further enhancing the company's growth potential.
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Analyst Views on AMD
Wall Street analysts forecast AMD stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for AMD is 284.10 USD with a low forecast of 200.00 USD and a high forecast of 377.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
36 Analyst Rating
27 Buy
9 Hold
0 Sell
Strong Buy
Current: 236.730
Low
200.00
Averages
284.10
High
377.00
Current: 236.730
Low
200.00
Averages
284.10
High
377.00
About AMD
Advanced Micro Devices, Inc. is a global semiconductor company. The Company is focused on high-performance computing, graphics and visualization technologies. Its segments include Data Center, Client and Gaming, and Embedded. Data Center segment includes artificial intelligence (AI) accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), smart network interface Cards (SmartNICs) and Adaptive system-on-Chip (SoC) products for data centers. Client and Gaming segment includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services. Embedded segment includes embedded CPUs, GPUs, APUs, FPGAs, system on modules (SOMs), and Adaptive SoC products. It markets and sells its products under the AMD trademark. Its products include AMD EPYC, AMD Ryzen, AMD Ryzen PRO, Virtex UltraScale+, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
AMD Q4 Earnings Outlook Shows Strength Amid AI Uncertainty
- Positive Earnings Outlook: AMD is expected to report strong performance in its traditional products on February 3, with Wedbush analysts predicting the company will modestly exceed Q4 estimates due to robust demand for PC and server computing, providing room for both sales and margin upside.
- Rising Server CPU Prices: With server CPU prices projected to rise by double digits, AMD has more time to optimize its product mix, creating a solid foundation for future sales growth, especially in the tight market environment entering Q1.
- Uncertainty in AI Products: While Bryson remains optimistic about AMD's competitiveness in the AI sector, he notes that potential slippage in AI products could impact overall growth, particularly within the current high-margin product set.
- Demand Potential from China: Bryson highlights that China appears on track to green-light some AI-related shipments, which could provide AMD with incremental demand, further enhancing the company's growth potential.
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- Positive Earnings Outlook: AMD is expected to report strong performance in its traditional products on February 3, with Wedbush analysts predicting the company will modestly exceed Q4 estimates due to robust demand for PC and server computing, providing room for both sales and margin upside.
- Rising Server CPU Prices: With server CPU prices projected to rise by double digits, AMD has more time to optimize its product mix, creating a solid foundation for future sales growth, especially in the tight market environment entering Q1.
- Uncertainty in AI Products: While Bryson remains optimistic about AMD's competitiveness in the AI sector, he notes that potential slippage in AI products could impact overall growth, particularly within the current high-margin product set.
- Demand Potential from China: Bryson highlights that China appears on track to green-light some AI-related shipments, which could provide AMD with incremental demand, further enhancing the company's growth potential.
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- Strong Stock Performance: The Dow Jones surged over 500 points to close at 49,407.66, while the S&P 500 and Nasdaq gained 0.54% and 0.56%, respectively, reflecting a positive overall market trend.
- Positive Economic Data: The ISM Manufacturing PMI increased to 52.6 in January from 47.9, surpassing market expectations of 48.5, suggesting a rebound in manufacturing activity that could drive economic growth and improve corporate earnings outlook.
- Significant Stock Volatility: Despite Walt Disney Co. reporting better-than-expected quarterly results, its stock fell over 7%, and IDEXX Laboratories slid around 5% after issuing cautious guidance, indicating market concerns over individual company prospects.
See More
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- Optimistic Sales Guidance: The company issued FY26 sales guidance above estimates, which not only enhances market trust in Palantir but may also attract more investors looking for long-term growth potential.
- AMD Earnings Expectations: Analysts anticipate that Advanced Micro Devices Inc. will report quarterly earnings of $1.32 per share on revenue of $9.67 billion after the closing bell, indicating continued growth expectations, although its stock rose modestly by 1.9% to $250.84 in after-hours trading.
- Market Sentiment Improvement: U.S. stock futures traded higher this Tuesday morning, indicating an improvement in investor sentiment towards the overall market, which could provide support for tech stocks and further boost the performance of related companies.
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- Investment Rumor Response: Following speculation about Nvidia's proposed $100 billion investment, CEO Jensen Huang stated that the investment was 'never a commitment,' yet Nvidia still plans to invest a substantial amount in OpenAI, highlighting the ongoing collaboration between the two companies.
- Growing Compute Demand: OpenAI executive Sachin Katti noted that the company's compute capacity surged from 0.2 gigawatts in 2023 to approximately 1.9 gigawatts by 2025, underscoring the deepening reliance on Nvidia GPUs and reflecting the rapid increase in AI compute needs.
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- Stock Price Increase: AMD's stock rose approximately 4% on Monday, closing at $9.36 per share, reflecting market optimism about the company's future performance, especially ahead of its upcoming earnings report.
- Market Share Analysis: Wedbush analyst Matt Bryson argues that AMD does not need to compete with Nvidia's massive market share, as focusing on robust sales of CPUs for personal computers and data center servers will ensure solid returns for shareholders.
- Margin Improvement: Bryson believes that tight supplies of server CPUs will enhance AMD's profit margins by allowing the company to command higher prices, as these products are already among its most lucrative offerings, further strengthening its profitability.
- Future Outlook: Bryson projects that AMD's stock price could rise by approximately 18% to $290 per share, with investors expecting more insights into CPU sales and AI growth strategies during the upcoming earnings conference call.
See More
