Advanced Micro Devices (AMD) stock is trading in positive territory Wednesday after the chipmaker beat top- and bottom-line expectations for its second quarter and issued a strong outlook for the third quarter.
In the three months ended June 29, AMD's revenue increased 8.9% year-over-year to $5.8 billion, driven by strong growth in its data center segment, which more than doubled to $2.8 billion. Its earnings per share (EPS) rose to 69 cents from 58 cents in the year-ago period.
"Our artificial intelligence (AI) business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors," said Advanced Micro Devices CEO Lisa Su in a statement. "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."
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The results topped analysts' expectations. Wall Street was anticipating revenue of $5.7 billion and earnings of 68 cents per share, according to Yahoo Finance.
For the third quarter, AMD said it expects revenue of approximately $6.7 billion, plus or minus $300 million, representing year-over-year growth of about 16% at the midpoint of the range. This satisfies analysts' forecast for revenue of $6.6 billion.
Is Advanced Micro Devices stock a buy, sell or hold?
Advanced Micro Devices has turned in a solid performance on the price charts this year, up more than 28%. And Wall Street thinks the semiconductor stock has more room to run.
According to S&P Global Market Intelligence, the average analyst target price for AMD stock is $189.84, representing an upside of more than 30% to current levels. Additionally, the consensus recommendation is Buy.
Financial services firm Wedbush is one of the most bullish outfits on the tech stock with a Buy rating and $200 price target.
“We believe AMD's rapid growth to $1 billion per quarter in sales and solid outlook very much supports our thesis that AMD has emerged as the clearest contender to Nvidia (NVDA) in supplying AI graphic processing unit and accelerators," says Wedbush analyst Matt Bryson.
And with cloud service providers looking to cut costs related to AI and build competition, "we believe, there is significant appetite for an NVDA alternative, creating room for AMD to meet or surpass our expectations for next year," he adds.
Wedbush's $200 price target sits nearly 40% above where AMD stock is currently trading.
Related Content
-
Student Visas: Older Americans' Ticket to Living in EuropeDo you envision strolling about Europe, a book in one hand, a glass of wine in the other? You could make that happen by studying there, even if you're older.
-
Three Reasons It May Be Time for an Annuity 'Refresh'Because of higher interest rates, inflation and newer annuity products, you could get a better deal today. Don't wait, though: Interest rates could start falling.
-
McDonald's Stock: How Small Changes Have Led to 100,000% ReturnsMcDonald's incremental operating improvements have added up over the years, sending the company's long-term profitability soaring.
-
Three Common Cash Flow Mistakes and How to Fix ThemBetter cash flow management could have a bigger impact on your retirement savings than simply making more money. Here's how to manage that.
-
Trusts for Child Influencers: What Families Need to KnowAs video blogging, or vlogging, gains popularity (and profitability), new laws are shaping financial obligations for caregivers of young creators.
-
Three Easy Financial Tips to Help Make This Year a SuccessEarly in a new year is the perfect time to assess where you are financially. Start by ensuring you're protected from fraud and evaluating your investments.
-
Stock Market Today: It's Mostly Onward and Upward for EquitiesThe major U.S. equity indexes were mixed Friday but closed an eventful week for earnings and data modestly higher.
-
Airbnb Stock Soars After Revenue, Earnings Top ExpectationsAirbnb stock soared Friday after the homestay and experiences platform beat fourth-quarter revenue and earnings expectations. Here's what you need to know.
