Yahoo Finance Should You Buy Advanced Micro Devices (AMD) Ahead of Q1 Earnings?
Advanced Micro Devices AMD is set to release its first-quarter 2024 results on Apr 30.
AMD expects first-quarter 2024 revenues to be $5.4 billion (+/-$300 million). The Zacks Consensus Estimate for revenues is pegged at $5.42 billion, suggesting growth of 1.24% year over year.
The consensus estimate for first-quarter earnings is pegged at 60 cents per share, up by a penny over the past 30 days.
AMD’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing in the remaining one, the earnings surprise being 2.96%, on average.
The chipmaker has been benefiting from portfolio strength and an expanding partner base. Its fourth Gen EPYC processor has been regularly deployed by hyperscalers to power their internal workloads and public instances.
In fourth-quarter 2023, Amazon, Alibaba, Google, Microsoft MSFT and Oracle ORCL brought more than 55 AMD-powered AI, HPC and general-purpose cloud instances into preview or general availability. Exiting 2023, this Zacks Rank #2 (Buy) had more than 800 EPYC CPU-based public cloud instances available. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Advanced Micro Devices, Inc. Price and EPS Surprise
Advanced Micro Devices, Inc. price-eps-surprise | Advanced Micro Devices, Inc. Quote
Let’s dig deep to find out why AMD is a wise buy ahead of the first-quarter earnings.
AMD’s Expanding Data Center Footprint Aids Prospect
AMD has expanded its data center footprint with the new Instinct MI300X accelerator. It combines CDNA 3 architecture and Zen 4 CPUs to deliver robust performance for HPC and AI workloads. Partners like Microsoft, Oracle and Dell are already using the accelerators in their systems.
AMD’s expanding portfolio, which now includes the Ryzen 8040 series processor with Ryzen AI and Instinct MI300 Series data center AI accelerators, has been noteworthy. It has introduced the ROCm 6 open software stack with significant optimizations and new features supporting large language Models.
AMD expects Data Center GPU revenues to grow sequentially in the first quarter and exceed $3.5 billion in 2024. Sequentially, AMD expects Data Center segment revenues to be flat, with a seasonal decline in server sales offset by a strong Data Center GPU ramp.
The Zacks Consensus Estimate for Data Center revenues is pegged at $2.28 billion, suggesting 76% growth year over year.
AI PCs are expected to benefit AMD’s top-line growth. The latest Ryzen 8040 series mobile processors, when combined with Ryzen AI NPU on-die, extend AMD’s leadership position in the AI-supported PC markets. Systems from Acer, Asus, Dell, HP HPQ, Lenovo and Razer are leveraging Ryzen 8040 series processors.
The reintroduction of the Ryzen Threadripper 7000 Series processors for high-end desktop users has been noteworthy. AMD also introduced its flagship laptop graphics processor, Radeon RX 7900M, the fastest AMD Radeon GPU ever developed for laptops. It is expected to have benefited from its top-line growth.
AMD’s first-quarter top-line growth is expected to have benefited from an improving PC market, particularly the consumer side. Per IDC’s latest report, 59.8 million PCs were shipped in first-quarter 2024, up 1.5% from the year-ago period. Lenovo and HP witnessed growth of 7.8% and 0.2%, respectively, while Dell Technologies lost 2.2%.
The Zacks Consensus Estimate for Client revenues is pegged at $1.206 billion, indicating 63.2% year-over-year growth.
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