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From MarketWatch, January 30:
AMD’s stock has gained 80% since the company last posted earnings, and that rally has ‘raised expectations significantly’
Advanced Micro Devices Inc. shares have rocketed roughly 80% since the company last posted earnings. That means the pressure is on heading into Tuesday afternoon’s report.
Despite the stock’s big rally, AMD’s AMD, -3.34% story at the moment is mixed, as the traditional personal-computer and data-center markets are under pressure. But AMD also has the potential to see more traction with its data-center AI offerings, and that’s been driving the stock’s recent momentum.
Even so, some analysts are skeptical that the upcoming report will be a positive catalyst. HSBC’s Frank Lee wrote earlier this week that there could be some “disappointment” as relates to the company’s forecast for its current quarter, given weakness in several key traditional business areas.
What to expect
Earnings: Analysts tracked by FactSet expect AMD to post 77 cents a share in adjusted earnings, up from 69 cents a share a year before.
Revenue: The FactSet consensus calls for revenue of $6.1 billion, up from $5.6 billion a year before.
Meanwhile, “the recent AMD share price rally has raised expectations significantly, especially for its AI MI300 GPU revenue potential,” he continued. He sees “significant AI upside” as already priced into the stock.
UBS’s Timothy Arcuri, meanwhile, sounded more upbeat.
“The tactical setup around earnings is complicated somewhat by the recent rally, but we are nonetheless more confident on AMD’s data center GPU revenue opportunity,” he wrote, noting that he was “significantly” upping his full-year expectations for 2024 and 2025.
AMD shares were off about 3% in Tuesday afternoon trading heading into the report....
....MUCH MORE
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