AMD Gears Up for Promising Q3 Earnings Report
Advanced Micro Devices, Inc. (AMD), based in Santa Clara, California, is a prominent player in the semiconductor industry, focusing on high-performance and adaptive processor technologies. With a market capitalization of $253.2 billion, AMD offers a wide range of products, including CPUs, GPUs, FPGAs, and adaptive SoCs. These technologies are designed to serve various computing platforms across cloud, edge, and end devices. The company is set to announce its fiscal Q3 earnings on Tuesday, October 29.
Analysts Predict Strong Earnings Growth
As the earnings season approaches, analysts forecast that AMD will report a profit of $0.71 per share, reflecting a sharp increase of nearly 34% from the $0.53 per share earned in the corresponding quarter last year. The company has a track record of beating Wall Street’s earnings estimates, accomplishing this feat for the last four quarters with a margin of 6.4% in the most recent release.
Future Projections Look Bright
Looking ahead to fiscal 2024, analysts project that AMD’s earnings per share (EPS) will rise to $2.56, which is an increase of 28.6% from $1.99 in fiscal 2023. For fiscal 2025, the outlook remains optimistic, with expectations for EPS to jump 70.7% to reach $4.37.
Stock Performance Outshines Competitors
Over the past year, AMD’s shares have increased by 47.1%, comfortably surpassing the S&P 500 Index’s 33.6% rise and the Technology Select Sector SPDR Fund’s (XLK) 34.8% growth in the same timeframe.
AI Chips Drive Recent Stock Surge
Following its Q2 earnings announcement on July 30, AMD’s stock climbed 4.4% as a result of stronger-than-expected financial performance. The company reported an EPS of $0.69, exceeding analysts’ forecasts. The stock’s surge can be attributed to impressive sales of its AI chips, especially the MI300X, which generated over $1 billion in sales during the quarter. Furthermore, the Data Center division experienced a remarkable 115% increase in revenue, totaling $2.8 billion, solidifying AMD’s position as the second-largest vendor of data center GPUs, just behind Nvidia.
Analysts Remain Positive on AMD Stock
Analysts have a favorable view of AMD’s stock, giving it an overall “Strong Buy” rating. Out of 37 analysts analyzing the stock, there are 30 “Strong Buys,” one “Moderate Buy,” and six “Holds.” This rating is slightly more optimistic than three months ago, when 29 analysts rated it as a “Strong Buy.” Currently, shares of AMD are trading below the average analyst price target of $193.06.
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Sohini Mondal
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