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."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free 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
-
Claiming the Standard Deduction? Here Are Five Tax Breaks for Retirement in 2025Tax Tips If you’re retired and filing taxes, these five tax credits and deductions could provide thousands in relief (if you qualify).
-
QUIZ: Test Your Retirement IQQuiz Are you smarter than…everyone else? Test your retirement smarts with this quiz.
-
Where There's a Will, There's a Way Your Assets Will Be Distributed as You WishYour will is the backbone of a strong, adaptable estate plan that ensures what you leave behind goes to your selected beneficiaries. Without a will, state laws determine who gets your assets.
-
I'm a Financial Adviser: This Is What You're Really Losing if You Cut Back on Your 401(k) ContributionsMissing out on the benefits of the employer match and compounding growth could force you to work longer and lower your standard of living in retirement. Here are some alternative options.
-
S&P 500 Hits New Highs as Rally Resumes: Stock Market TodayTech stocks were the biggest gainers on Wall Street today, with Nvidia and Dell making notable moves.
-
Should You Buy Gold as It Tops $4,000? Here's What the Experts SayRate cuts, a weak dollar and macro uncertainty have helped create a "perfect storm" for gold this year. Should investors add exposure or is it too late to buy?
-
Preferred Bank Stocks: The Investment Retirees (and Others) May Be Missing Out OnMost large banks issue preferred stocks that pay out fixed dividends, often with higher yields than bonds. Should you make room for them in your portfolio?
-
Don't Let Your Equity Compensation Trip You Up: A Financial Expert's GuideStock options, RSUs and other executive perks can come with some serious strings attached. To avoid a nasty tax surprise, you need a plan.
-
Rally Fades on Mixed AI Revolution News: Stock Market TodayAll three main U.S. equity indexes opened higher but closed lower as a seven-session winning streak for the S&P 500 came to an end.
-
The Spendthrift Trap: Here's One Way to Protect Your Legacy From an Irresponsible HeirA spendthrift clause in an estate plan can protect an inheritance from a financially irresponsible child's debts and poor decisions.
