Advanced Micro Devices (AMD) recently reported its first-quarter earnings, which exceeded analyst expectations, showing strong revenue and earnings. Let’s take a look at how Wall Street analysts are reacting to these results and the company’s updated guidance.
Cantor Fitzgerald analyst C.J. Muse has an optimistic outlook on AMD, emphasizing that while the MI300 ramp is impressive, supply constraints are limiting even greater growth potential. The analyst also highlighted weakness in the gaming segment as a potential offset to growth in other areas.
Meanwhile, Mizuho analyst Vijay Rakesh pointed out that AMD’s artificial intelligence segment is below Street expectations, but still remains a strong second-source supplier in the market. The company’s guidance for 2024 AI GPU revenue came in slightly below optimistic estimates, with concerns over aggressive pricing from competitors like Nvidia.
Piper Sandler’s analyst, Harsh Kumar, noted that while AMD faced challenges in its gaming and embedded segments, key areas like the MI300 and server business performed well. Despite concerns over non-core pieces, Kumar highlighted the company’s positive momentum in core businesses that investors value.
Goldman Sachs analyst Toshiya Hari praised AMD’s growth in data center GPU and server CPU segments, seeing potential for continued market share gains. The company’s focus on long-term investments and product roadmap remains a key factor in benefiting from AI infrastructure spending.
On the other hand, KeyBanc analyst John Vinh expressed cautious optimism, noting that while AMD delivered solid results in the first quarter, the second-quarter guidance was mixed. Expectations for share gains and growth are high, posing some risk to the stock valuation.
This sentiment was echoed by Wedbush analyst Matt Bryson, who highlighted AMD’s robust AI guidance, emphasizing over 1,000% year-over-year growth in GPU sales. Despite this strong performance, the stock experienced a decline, highlighting a potential disconnect between investor expectations and the company’s actual growth trajectory.
Truist analyst William Stein raised concerns over AMD’s $4-billion guidance for data center GPU, noting that it may draw a mixed reaction from investors. Stein emphasized the competition between AMD and Nvidia, as well as emerging CPU competitors in the market.
Lastly, Roth MKM analyst Suji Desilva emphasized AMD’s AI growth as a counterbalance to non-AI headwinds, highlighting the company’s progress in diversifying revenue streams and expanding customer opportunities.
Overall, while AMD’s recent earnings report showcased strong performance in key segments, concerns over supply constraints, market competition, and investor expectations continue to shape analysts’ outlook on the semiconductor giant. With a focus on key growth areas like artificial intelligence and data center solutions, AMD is navigating a dynamic market landscape to drive future success.
