Key Takeaways
- Advanced Micro Devices is set to report fourth-quarter earnings after the closing bell Tuesday.
- Its stock has taken a hit, losing nearly a third of its value in the past 12 months amid concerns about the company’s outlook and ability to compete with Nvidia’s offerings.
- However, analysts are more bullish than bearish on the stock, and suggested AMD could continue to benefit from strong spending on AI along with rivals.
Advanced Micro Devices (AMD) is set to report its fourth-quarter results after the market closes Tuesday, with analysts projecting revenue and earnings growth on strong demand for AI chips.
AMD is expected to report revenue of $7.54 billion, up 22% year-over-year, and earnings of $1.1 billion, or 67 cents per share, up from $667 million, or 41 cents per share, a year earlier.
Of the 14 analysts covering the stock tracked by Visible Alpha, eight have issued a “buy” or equivalent rating, compared with five “hold” ratings, and one “sell.” Their consensus price target is $164, about 40% above Tuesday’s intraday price of $117.46.
Shares have taken a hit, losing nearly a third of their value in the past 12 months amid concerns about the chipmaker’s outlook and ability to compete with Nvidia’s (NVDA) offerings.
However, in notes to clients last week, Bank of America and Raymond James analysts suggested competition in the AI space from Chinese firms like DeepSeek, which rocked markets last week with its claims of a sophisticated, cost-efficient AI model, could push U.S. tech firms to spend even more on AI, to the benefit of chipmakers like AMD.
“Spending for AI continues unabated,” Citi analysts said last week, pointing to Meta’s (META) plans to invest $60 billion to $65 billion in capital expenditures this year. That level of AI spending is “good news” for AMD, as well as rivals like Broadcom (AVGO), the analysts said.
UPDATE—Feb. 4, 2025: This article has been updated to reflect more recent analyst estimates and share price values.