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AMD Earnings Report: Can the Chipmaker Maintain Momentum Amid Mixed Market Signals?

Alex Vellor
07:14am, Tuesday, Feb 04, 2025
AMD Earnings Report: Can the Chipmaker Maintain Momentum Amid Mixed Market Signals?
Photo by Timothy Dykes on Unsplash.com

As traders eagerly await the earnings announcement from Advanced Micro Devices, Inc. (NASDAQ: AMD), scheduled for release today after market close, there are several key indicators to keep on your radar.

Indicator Value
Earnings Report Today after market close
Previous Revenue $6.82B (17.6% growth)
Predicted Revenue $7.54B (22.3% growth)
EPS (Current Quarter) $1.09
AMD Share Price Drop (Last Month) -12.6%
Analysts' Price Target $169.82
Current AMD Price $113.30

In the previous quarter, AMD managed to exceed revenue expectations, reporting earnings of $6.82 billion—a 17.6% increase compared to the same period last year. However, despite this triumph, the company's revenue guidance fell short of analysts’ forecasts. This slight hiccup poses a question for investors: should they consider AMD a buy or sell as the earnings report approaches? For a detailed analysis, feel free to explore our comprehensive insights!

For this quarter, analysts predict AMD’s revenue will climb 22.3% year over year, reaching $7.54 billion. This projection marks a notable uptick from the 10.2% growth observed in the same quarter last year, while adjusted earnings are expected to settle at $1.09 per share. The general consensus among analysts has remained optimistic in the past month, reinforcing the belief that AMD will maintain its momentum as it heads into earnings. However, it's worth noting that the company has missed Wall Street’s revenue estimates on two occasions over the past two years.

Shifting our focus briefly to AMD's competitors within the processors and graphics chip market, we see a mixed bag of results. For instance, Qorvo reported a 14.7% year-on-year revenue decline but managed to surpass analysts' expectations, leading to no significant change in their stock price. Conversely, Allegro MicroSystems faced a steeper revenue drop of 30.2%, yet its stock rose by 5.4% following its earnings call.

Looking at the broader market context, 2024 has been a robust year thus far, with the Federal Reserve successfully battling inflation without triggering a recession—a phenomenon affectionately termed a "soft landing." With interest rates now on the decline and political dynamics shifting with the approaching presidential election in November 2024, market sentiment continues to tilt upward, albeit with some volatility. Despite some processors and graphics chips showing promising progress, the sector as a whole has seen an average drop of 4.7% in share prices over the last month. AMD, specifically, has declined by 12.6% during this period. Nevertheless, analysts maintain a favorable outlook, with an average price target set at $169.82 compared to AMD’s current share price of $113.30.

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Alex Vellor

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