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AMD stock hit a new all-time high on a rosy outlook

AMD stock hit a new all-time high on a rosy outlook

AMD (NASDAQ: AMD) stock price rallied more than 10% after reporting stronger than expected second-quarter earnings. The robust third quarter and full-year outlook added to investor’s sentiments.

Its second-quarter revenue of $1.93bn topped analysts’ expectations by $70 million, indicating an upside of 26% from the past year period. The sharp revenue growth from computing and graphics segments helped in generating massive revenue growth. Its computing and graphics segments revenue surged 45% year over year.   

“We delivered strong second-quarter results, led by record notebook and server processor sales as Ryzen and EPYC revenue more than doubled from a year ago,” said Dr. Lisa Su, AMD president, and CEO. “Despite some macroeconomic uncertainty, we are raising our full-year revenue outlook as we enter our next phase of growth driven by the acceleration of our business in multiple markets.”

The company expects third-quarter revenue in the range of $2.45-2.65B, up close to 45% from the year-earlier, and representing a growth of 32% from the previous quarter, thanks to revenue expectations from Ryzen and Epyc processor sales. The company also claims that its semi-Custom revenue is likely to benefit from the next-gen game consoles.

It expects full-year revenue to jump 32% compared to 2019. The company was previously expecting full-year revenue growth in the range of 20-30%. The PC, gaming, and data center products are likely to benefit from improving demand.

AMD Advanced Micro Devices, Inc. daily Stock Chart
AMD stock price performance. Finviz.com chart.

Bank of America has provided a price target of $100 after the solid quarterly performance. The firm praised AMD’s solid pipeline, consistent execution and, expanding market opportunity. The firm has raised AMD’s CY20/21/22E EPS estimates by 6%, 11%, and 17%, respectively. It expects AMD to post $2B in revenue by CY22E and earnings per share is likely to $3 by CY23E.

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Siraj is a finance writer based in Saudi Arabia with a strong understanding of and passion for the stock market, cryptocurrency, economics, and finance. He has worked for international clients for many years on several projects related to the stock market, equity research, accounting, and finance. Siraj is a published financial analyst on some of the largest finance websites.