AMD’s Q1 Outlook and Market Developments
Advanced Micro Devices (NASDAQ: AMD) is set to report its first-quarter results after the market closes on May 5, 2023. The company expects approximately $9.8 billion in revenue, a 32% year-over-year increase, while analysts anticipate revenue closer to $9.9 billion. Additionally, earnings per share are projected to rise by 33% to $1.28. These optimistic projections are bolstered by strong demand for server and client processors and signs of rising CPU prices due to ongoing shortages.
AMD’s guidance will be supported by significant contracts with OpenAI and Meta Platforms, beginning in late 2026, when the company will deploy 6 gigawatts (GW) of data center computing capacity for both clients. Meanwhile, prices for central processing units (CPUs) are on the rise, with a 15% increase expected for client CPUs and a 20% surge noted for server CPUs in recent months.
As of April 2023, AMD’s stock has surged over 59%, reflecting heightened investor confidence in tech stocks. However, it currently trades at a high multiple of earnings—133 times trailing earnings—but is expected to see a significant increase in earnings, with a projected 61% rise to $6.71 per share this year.
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