AMD Stock Outlook: Analyst Expects Strong AI Revenue in Q1 2024 Earnings Report

HSBC's Frank Lee upgraded their rating on Advanced Micro Devices (NASDAQ: AMD) from Hold to Strong Buy on 2024/04/16. The analyst also announced a $225 price target.

According to Lee's analysis, the recent 15% correction in AMD's stock price has reset market expectations for the company's 2024 and 2025 MI300 revenue. However, Lee believes that when AMD reports its Q1 2024 earnings on April 30, 2024, strong supply and demand dynamics will ensure that AI revenue exceeds management's guidance.

Lee further highlighted that AMD's next-generation AI GPU is emerging as a more direct competitor to Nvidia's GB200 in 2025. This development, along with the stock's attractive risk/reward profile, has led the analyst to upgrade their rating to Strong Buy.

It's worth noting that Lee's rating aligns with the consensus among top-rated analysts, as 90.9% currently rate AMD as a Strong Buy or Buy. Only 9.1% of analysts see it as a Hold, with none recommending selling the stock.

Analysts also have high expectations for AMD's upcoming year, with a consensus forecast indicating earnings per share (EPS) of $2.21. If these predictions hold true, AMD's next yearly EPS will see an impressive 317.3% increase on a year-over-year basis.

Investors have reason to be optimistic about AMD's performance, as the stock has shown strong growth in recent periods. Since the company's last quarterly report on December 30, 2023, AMD's stock price has increased by 10.9%. Looking at the bigger picture, the stock has soared by 81.9% year-over-year, outpacing the S&P 500, which has only seen a 21.7% increase during the same period.

HSBC analyst Frank Lee is ranked among the top 25% of Wall Street analysts by WallStreetZen. With an average return of 27.8% and a win rate of 50%, Lee specializes in the Real Estate and Technology sectors. This expertise suggests that their rating upgrade on AMD carries weight and should be taken into consideration by investors.

Advanced Micro Devices, Inc. is a global semiconductor company that operates in two segments: Computing and Graphics, and Enterprise, Embedded and Semi-Custom. The company's product portfolio includes x86 microprocessors, accelerated processing units, chipsets, discrete and integrated graphics processing units (GPUs), data center and professional GPUs, and development services.

AMD also offers server and embedded processors, semi-custom System-on-Chip (SoC) products, development services, and technology for game consoles. Their processors are widely used in desktop and notebook personal computers, while their Radeon graphics products cater to the gaming and professional graphics market. The company serves various industries, including original equipment manufacturers, cloud service providers, system integrators, and retailers.

Headquartered in Santa Clara, California, AMD has a rich history dating back to its incorporation in 1969. With its innovative products and strong market presence, the company continues to capture the attention of analysts and investors alike.

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