AMD stock soared on Wednesday after the chipmaker trounced Wall Street's targets for the fourth quarter. Advanced Micro Devices also guided higher for the current quarter and full year.
The Santa Clara, Calif.-based company late Tuesday said it earned an adjusted 92 cents a share on sales of $4.83 billion in the December quarter. Analysts had expected AMD earnings of 76 cents a share on sales of $4.52 billion, according to FactSet. On a year-over-year basis, AMD earnings soared 77% while sales climbed 49%.
Strong sales of Epyc server processors fueled AMD's results in the fourth quarter.
For the current quarter, AMD forecast sales of $5 billion, vs. analyst estimates for $4.35 billion. Its guidance would translate to sales growth of 45% year over year in the first quarter.
For the full year, AMD expects sales of $21.5 billion, an increase of 31% over its 2021 revenue. Analysts had predicted $19.29 billion in sales for 2022, FactSet said.
AMD Stock Pops On Earnings News
On the stock market today, AMD stock leapt 5.1% to close at 122.76. During the regular session Tuesday, AMD stock rose 2.2% to 116.78.
"Each of our businesses performed extremely well (in 2021), with data center revenue doubling year over year driven by growing adoption of AMD Epyc processors across cloud and enterprise customers," Chief Executive Lisa Su said in a news release.
She added, "We expect another year of significant growth in 2022 as we ramp our current portfolio and launch our next generation of PC, gaming and data center products."
AMD makes central processing units for PCs and servers. It also makes graphics processors for PCs, game consoles and data centers.
AMD Stock Nabs Price-Target Hikes
At least 12 Wall Street analysts raised their price targets on AMD stock after the company's earnings report. Of those, eight have buy ratings on the stock and four are neutral.
"With all sorts of challenges when it comes to securing supply, AMD delivered a big beat and a raise and is guiding for very strong growth in 2022 as well," BMO Capital Markets analyst Ambrish Srivastava said in a note to clients.
He added, "Guidance for 2022 appear balanced and moored on continued strong growth/share gains in servers, followed by game consoles, graphics and PCs."
However, Srivastava rates AMD stock as market perform. He raised his price target to 130 from 120 on Wednesday.
Rosenblatt Securities analyst Hans Mosesmann reiterated his buy rating on AMD stock and upped his price target to 200 from 180.
AMD will continue to take share from Intel in the data center market this year, Mosesmann said in a report. AMD's pending acquisition of Xilinx will be another catalyst in the segment, he said.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
