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On Wednesday, Cantor Fitzgerald reiterated an Overweight rating on AMD (NASDAQ:AMD) stock, maintaining a price target of $135.00. According to InvestingPro data, AMD currently trades at $107.56 with a market capitalization of $173.51B. The stock has shown significant volatility, with analyst targets ranging from $90 to $250. The firm’s analysis followed AMD’s recent financial update, which revealed a modest outperformance and an upward revision for the December and March quarters compared to the buyside’s anticipation of a slight shortfall. AMD’s Client segment was highlighted as a key driver of growth, with a 23% quarter-over-quarter increase contributing to a robust 52% growth in calendar year 2024, hinting at significant x86 market share gains. InvestingPro analysis shows AMD maintaining strong financials with a current ratio of 2.5, indicating healthy liquidity, and revenue growth of 9.88% over the last twelve months.
Despite the positive aspects, Data Center results and forecasts fell short of consensus expectations, with revenues of $3.86 billion versus the anticipated $4.1 billion, and a guidance of $3.6 billion as opposed to the expected $3.9 billion. While AMD trades at a high P/E ratio of 94.51, InvestingPro subscribers have access to 15+ additional exclusive tips and comprehensive valuation metrics that help evaluate AMD’s growth potential in the data center market. Management noted that Data Center GPU trends in the first half of 2025 are expected to mirror those in the second half of 2024, with projections at $3.4 billion. However, AMD anticipates an accelerated ramp-up of the MI350 to mid-2025 due to stronger demand and positive customer feedback, with total Data Center GPU revenues expected to close out 2025 with substantial growth over the 2024 exit rate.
The analysis by Cantor Fitzgerald indicates that while this outlook aligns with their own estimate of $7 billion in Instinct revenue for the entire calendar year 2025, it contrasts with a consensus forecast of a $5.9 billion increase in total Data Center revenue, implying an unlikely 50% plus growth in Data Center CPU. In a broader context, AMD’s management is aiming for a 15-16% year-over-year increase in operating expenses, envisioning total revenues to expand at a more rapid pace.
Cantor Fitzgerald has adjusted its revenue growth model for AMD in 2025 to 21%, slightly below the consensus of 24% but significantly above their previous estimate of 14%. Consequently, the firm’s earnings per share (EPS) model for 2025 is now set at $4.50, compared to the consensus of $4.88, yet they anticipate an acceleration in EPS growth to $6.00 in 2026. Based on InvestingPro’s Fair Value analysis, AMD currently shows potential for value appreciation, with analysts maintaining a strong consensus recommendation of 1.8 (where 1 is Strong Buy and 5 is Strong Sell). With the current aftermarket indication of AMD shares at approximately $110 and a potential upside of over 20%, Cantor Fitzgerald reaffirms its Overweight rating. The firm also identified the detailed roadmaps for MI350/400 and AMD’s ability to achieve CEO Lisa Su’s projected "Tens of Billions" in Accelerator revenue over the next few years as key catalysts for the stock.
In other recent news, Advanced Micro Devices, Inc. (AMD) has experienced a series of analyst adjustments following its recent financial results. Citi analysts downgraded AMD’s stock rating to Neutral and lowered the price target to $110, citing concerns over a potential inventory build-up of CPUs and a lack of specific forecasts for AI revenue. Piper Sandler also reduced its price target for AMD to $140, despite maintaining an Overweight rating on the stock. This adjustment reflects lowered expectations for the company’s performance in the coming years, including a predicted slowdown in GPU sales for the March 2025 quarter.
Meanwhile, Northland maintained its Outperform rating and $175 price target, anticipating robust growth in AI for 2025 and an increased market share in the server and PC sectors. Goldman Sachs lowered its price target on AMD to $125, while reaffirming a Neutral rating, observing questions concerning the sustainability of AMD’s Client business. Lastly, UBS analyst Timothy Acuri adjusted the price target for AMD to $175 but maintained a Buy rating, expressing optimism for AMD’s future performance, particularly in the AI and GPU markets.
These adjustments and predictions from the analysts highlight the recent developments in AMD’s financial performance and market expectations.
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