Advanced Micro Devices Stock Pops on Hot Data Center Sales
Advanced Micro Devices stock is higher Wednesday after the chipmaker's strong second-quarter report and upbeat outlook. Here's what you need to know.


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."

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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.
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Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.
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