AMD Rises 5 After Q2 Earnings Exceed Expectations and Positive Outlook

Shares of Advanced Micro Devices (AMD) have risen around 5% early Wednesday following the chipmaker’s second-quarter results that narrowly exceeded analyst expectations. The positive outlook for the current quarter has also contributed to this boost.

AMD reported adjusted earnings per share of $0.69, slightly surpassing the $0.68 estimate on Wall Street. Revenue came in at $5.84 billion, comfortably exceeding the $5.72 billion anticipated by analysts.

Dr. Lisa Su, Chair and CEO of AMD, credited the strong Q2 performance to substantial growth in the Data Center and Client segments within a competitive semiconductor market. She also highlighted the significant acceleration in AMD’s AI business, contrasting it with Microsoft’s less impressive AI results reported earlier today.

Su noted that the rapid advancement of generative AI technology is creating ample opportunities for AMD to offer innovative solutions. Analysts from Mizuho echoed this sentiment, suggesting that while AMD’s AI GPU performance has been promising, there is considerable potential for further growth. They believe AMD is still in the early stages of its AI GPU ramp-up, with significant room for expansion.

Looking ahead, AMD’s forecast for the third quarter of 2024 is optimistic. The company projects revenue between $6.7 billion and $7 billion, compared to experts’ expectations of $6.61 billion.

Currently, AMD’s most exciting products include the Instinct, EPYC, and Ryzen processors. Additionally, the company has raised its full-year MI300 outlook to $4.5 billion, up by $500 million from previous estimates.

Despite a recent decline of nearly 7% in AMD’s stock over the past month, today’s performance offers a potential turnaround. But is it a good time to buy AMD?

We have analyzed this opportunity using VectorVest’s stock analysis software, which provides three key indicators to help you make informed decisions: relative value (RV), relative safety (RS), and relative timing (RT). Each indicator is rated on a scale of 0.00-2.00, with 1.00 being the average, making it easy to interpret.

Here’s how AMD fares:

• Excellent Upside Potential: The RV rating assesses a stock’s long-term price appreciation potential against AAA corporate bond rates and risk. AMD has an excellent RV rating of 1.50.
• Excellent Safety: The RS rating measures risk based on financial consistency, debt-to-equity ratio, business longevity, and other factors. AMD’s RS rating of 1.45 indicates strong safety.
• Poor Timing: The RT rating reflects the stock’s price movement direction and magnitude over various time frames. AMD’s RT rating of 0.75 suggests poor timing currently.

The overall VST rating of 1.25 is favorable for AMD, but the stock is rated a HOLD in the VectorVest system. If the current price trend continues, this recommendation may change soon.

Stay updated on this opportunity and consider a free stock analysis at VectorVest to make informed decisions when the timing is right!

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VectorVest recommends buying safe, undervalued stocks that are rising in price. AMD’s Q2 earnings surpassed expectations, and with an upbeat outlook reflecting continued benefits from AI expansion, the stock has excellent upside potential and safety, though current timing is a concern.