AMD’s Upcoming Earnings and Market Challenges Ahead
With a market capitalization of $154 billion, Advanced Micro Devices, Inc. (AMD) specializes in semiconductor technology. The Santa Clara, California-based company offers a versatile range of high-performance processor technologies, which include CPUs, GPUs, FPGAs, Adaptive SoCs, and advanced software expertise. These innovations support leading computing platforms for cloud, edge, and end devices. AMD is set to announce its fiscal Q1 earnings for the year 2025 after market close on Tuesday, May 6.
Analysts’ Earnings Predictions
Leading up to the earnings announcement, analysts forecast a profit of $0.75 per share for AMD, representing a significant increase of 74.4% from $0.43 per share in the same quarter last year. The company has consistently met or exceeded Wall Street’s earnings expectations over the last four quarters. In its previous quarter, AMD reported adjusted earnings of $1.09 per share, which surpassed consensus estimates by 1.9%.
Yearly Expectations and Market Performance
For the entire fiscal year, analysts project AMD’s earnings per share (EPS) to reach $3.87, a 47.7% increase from $2.62 in fiscal 2024. Additionally, they expect EPS to grow by 36.2%, reaching $5.27 by fiscal 2026. However, AMD’s stock has faced challenges, declining by 46% over the past 52 weeks. This contrasts sharply with the S&P 500 Index’s ($SPX) 4.4% gain and the Technology Select Sector SPDR Fund’s (XLK) 3.9% decrease during the same period.
Effects of Export Restrictions
On April 16, shares of AMD dropped nearly 7.4% following news of new U.S. export restrictions. The company must now secure an export license to sell its MI308X artificial intelligence (AI) processors in China. Due to the slim chances of acquiring such a license, AMD anticipates an inventory loss of $800 million, limiting its ability to tap into the lucrative Chinese market.
Recent Earnings Report and Growth Factors
Prior to these challenges, on February 4, AMD experienced a 4.6% increase in share price after a positive Q4 earnings release. The company reported revenue growth of 24.2% year-over-year, reaching a record $7.7 billion, which exceeded consensus estimates by 1.9%. AMD’s adjusted earnings improved by 41.6% compared to the previous year, supported by strong growth in both data center and client segment revenues.
Analyst Ratings and Future Outlook
Wall Street analysts hold a cautiously optimistic stance on AMD’s stock. The overall rating is classified as “Moderate Buy.” Among the 41 analysts monitoring the stock, 26 offer a “Strong Buy,” one suggests a “Moderate Buy,” and 14 recommend a “Hold.” The mean price target for AMD sits at $146.53, indicating a potential upside of 66% from current levels.
On the date of publication, Neharika Jain did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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