AMD Stock Jumps on Better-Than-Expected Outlook, AI Sales

[Amara]

Advanced Micro Devices, Inc. (NASDAQ: AMD) posted a second-quarter earnings win with a slight beat on analyst expectations, resulting in a more than 9% rise in AMD stock during premarket trading Today

Key Financial Highlights:

Adjusted Earnings Per Share (EPS): $0.69, just above the $0.68 consensus.
Revenue: $5.84 billion, exceeding the predicted $5.72 billion.

This strong performance in the competitive semiconductor market is attributed to robust demand in AMD’s Data Center and Client segments. Dr. Lisa Su, AMD’s Chair and CEO, highlighted the company’s revenue and earnings growth, crediting record Data Center segment revenue and the acceleration of their AI business.

CEO Commentary:
"The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business," Dr. Su stated.

Financial Outlook for Q3 2024:

Revenue Guidance: $6.7 billion, plus or minus $300 million, surpassing the analyst consensus of $6.61 billion.
Full-Year MI300 Outlook:

Increased from $4.0 billion to $4.5 billion.
Analyst Reactions:

KeyBanc Capital Markets: Analysts expressed encouragement by AMD's strong results and fine-tuned their estimates while reiterating an Overweight rating on the stock.
Mizuho: Analysts noted that AMD is still in the early stages of its AI GPU ramp and well-positioned to gain market share. They adjusted their EPS estimates and slightly lowered the price target from $215 to $195.

CFO Commentary:
AMD’s CFO, Jean Hu, echoed the sentiment of strong execution in the second quarter, emphasizing the company’s revenue growth and gross margin expansion.

"We delivered solid earnings growth, while increasing our strategic AI investments to build the foundation for future growth," Hu commented.

 

[Adewale Stock]

People are predicting that AMD stock will soar higher in the next couple of months, it is possible that that happens due the the demand on Chip stocks and among other things. However, we asked that you all do your own due diligence before investing in AMD stocks. The AMD stock prediction here does not determine the direction of the stock price. Take note

 

[Adewale Stock]

new update about AMD stock Jim Cramer reacted to Monday’s market by questioning if there’s any money left to invest and why mutual funds aren’t holding enough cash. The S&P 500 fell 17.77 points, or 0.3%, to 5,616.84. The Dow Jones Industrial Average rose 65.44 points, or 0.2% to 41,240.52. The Nasdaq composite fell 152.03 points, or 0.9%, to 17,725.76.

 

[Adewale Stock]

“What do we do if we’re out of money? Don’t mutual funds have enough cash? That’s my reaction to today’s market action. Right now, mutual funds know they have to pivot out of consistent growth stocks, especially tech stocks like software and semiconductors, which don’t benefit from rate cuts. They need to swap into companies that can supercharge their earnings as the Fed lowers rates. We all recognize that cyclical stocks, the ones that benefit from lower rates, can go higher, maybe much higher.”

Cramer pointed out that mutual funds now need to shift away from consistent growth stocks, particularly in tech sectors like software and semiconductors, which don’t benefit from interest rate cuts. Instead, they should move towards companies that can boost their earnings as the Federal Reserve reduces rates.