/Advanced%20Micro%20Devices%20Inc_%20logo%20and%20chart%20data-by%20Poetra_%20RH%20via%20Shutterstock.jpg)
Valued at $188.3 billion by market cap, Advanced Micro Devices, Inc. (AMD) operates as one of the pioneers in the semiconductor industry. The Santa Clara, California-based semiconductor giant focuses on building products that accelerate next-generation computing experiences and operates through Data Center, Client, Gaming, and Embedded segments.
AMD is expected to announce its fourth-quarter results on Tuesday, Feb. 4. Ahead of the event analysts expect the company to report a non-GAAP profit of $0.88 per share, up 49.2% from $0.59 per share reported in the year-ago quarter. Furthermore, the company has a robust earnings surprise history. It has surpassed Wall Street’s earnings estimates in each of the past four quarters.
For the full fiscal 2024, analysts expect AMD to deliver an adjusted EPS of $2.54, up 27.6% from $1.99 in fiscal 2023. While in fiscal 2025, its earnings are expected to surge 63.4% year-over-year to $4.15 per share.
AMD stock prices have plummeted 21.9% over the past 52 weeks, substantially underperforming the Technology Select Sector SPDR Fund’s (XLK) 20% gains and the S&P 500 Index’s ($SPX) 21.8% returns during the same time frame.
AMD's Q3 earnings and revenues have shown a remarkable surge, driven by the strong ramp-up of AMD Instinct™ GPU shipments and AMD EPYC™ CPU sales. The Data Center segment's revenues soared 122.1% year-over-year to a record $3.5 billion, while Client revenues surged 29.5% year-over-year to $1.9 billion. This substantial growth led to a 17.6% increase in total net revenues to $6.8 billion. Moreover, due to margin expansion, the non-GAAP net income skyrocketed 32.5% year-over-year to $1.5 billion. However, AMD's stock prices tanked 10.6% in the trading session after the release of its Q3 results on Oct. 29, as the company's Q4 revenue guidance of $7.2 billion to $7.8 billion fell short of Wall Street's expectations.
Conversely, AMD's Gaming segment revenues plummeted by a significant 69.3% year-over-year to $462 million, and its Embedded segment revenues declined 25.4% to $927 million, which impacted AMD's overall sales growth. The company has faced several downgrades and price target cuts from analysts since then. Furthermore, analysts and investors remain cautious about AMD's prospects given the intense competition it faces from industry heavyweight NVIDIA Corporation (NVDA).
Nonetheless, AMD has a consensus “Strong Buy” rating. Out of the 38 analysts covering the stock 29 recommend “Strong Buy,” one advises “Moderate Buy,” and eight suggest “Hold” rating. It’s mean price target of $185.86 indicates a 60.2% premium to current price levels.
