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
-
Stocks End Strong Month on a Down Note: Stock Market TodayThere was likely a bit of profit-taking ahead of a historically weak September.
-
The New Rules for Student LoansWhether you’re paying off education debt now or planning to borrow in the future, get ready for bigger payments and lower loan limits.
-
Stocks End Strong Month on a Down Note: Stock Market Today
There was likely a bit of profit-taking ahead of a historically weak September.
-
If You'd Put $1,000 Into UnitedHealth Group Stock 20 Years Ago, Here's What You'd Have TodayUNH stock was a massive market beater for ages – until it wasn't.
-
The Seven-Day Financial Reset: A Simple Plan to Get Control of Your Money, From an ExpertSometimes, getting unstuck requires a reset. These practical steps can help you tackle your money issues and feel less overwhelmed by it all.
-
Three Pros (and Four Cons) of Hiring Multiple Financial Advisers: The View From a Financial AdviserThere's nothing to stop you from working with several financial advisers instead of just one. But take a balanced view of the risks and rewards first.
-
S&P 500 Tops 6,500 Even as Nvidia Slips: Stock Market TodayThe world's most valuable company closed lower after earnings, but the S&P 500 managed to notch a new record high.
-
DexCom, GE, SLB: Why Experts Rate These Stocks at Strong BuyWall Street gives these three diverse names Strong Buy recommendations with high potential upside.
-
Here's Why Munis Aren't Just for Wealthy Investors NowBuyers of all levels should be intrigued by municipal bonds' steep yield curve, strong credit fundamentals and yield levels offering an income buffer.
-
Stocks Edge Higher With Nvidia, Fed in Focus: Stock Market TodayThe AI bellwether reports earnings after today's close, while Wall Street is keeping a cautious eye on President Trump's attacks against the Fed.
