Proactive Investors - Advanced Micro Devices, Inc. (NASDAQ:AMD) (AMD) should be able to achieve its third quarter earnings estimates assuming some benefit from improving consumer PC shipments, analysts at Wedbush believe.
When reporting its 2Q results in August, the chipmaker guided 3Q revenue of $5.7 billion, plus or minus $300 million, and a non-GAAP gross margin of approximately 51%.
Wall Street analysts, on average, expect AMD to report revenue of $5.71 billion for 3Q and earnings per share of $0.68 when it hands down its latest financial results after the market closes on Tuesday, October 31, 2023.
The Wedbush analysts believe that the risk ahead for AMD is the fourth quarter and perhaps the first quarter of 2024.
“The ramp of El Capitan (an HPE-built, AMD-powered supercomputer), should provide AMD some momentum, however, we are less clear that AMD can hit elevated expectations which we believe will eventually require better server Central Processing Unit (CPU) shipments in light of continued weakness in Cloud Service Provider (CSP) spend,” they wrote in a note to clients.
“Having said this, we exited the past few weeks more confident around AMD's position with MI300, and believe AMD is particularly well positioned to thrive in the second half of 2024 as its AI revenues ramp at the same time CSP server spend likely normalizes and a PC refresh cycle commences.”
The analysts summarized by stating that while they are less certain about AMD’s near-term results, they have a positive view of the company moving through 2024 and 2025, awarding the stock an ‘Outperform’ rating on the stock and a US$155 price target.
AMD shares traded at about US$97 in the early afternoon on Wednesday.