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On Wednesday, Cantor Fitzgerald sustained its positive stance on AMD shares (NASDAQ:AMD), maintaining an Overweight rating and a price target of $120. Currently trading at $98.92, AMD has shown strong momentum with analyst targets ranging from $75 to $200. The firm’s analysts highlighted AMD’s performance, noting that the company’s financial results for the first half of 2025 were better than anticipated, although the outlook for the second half remains uncertain due to potential seasonal variations in Client and Data Center (DC) CPU markets. According to InvestingPro analysis, AMD’s current valuation appears slightly below Fair Value, with the stock showing a high P/E ratio of 98x.
AMD’s financial results for the March quarter showed revenues of $7.44 billion with earnings per share (EPS) of $0.96, surpassing consensus estimates of $7.1 billion in revenue and $0.94 EPS. The semiconductor giant, with a market capitalization of $159.77 billion, has maintained strong revenue growth of 13.69% over the last twelve months. The guidance for the June quarter is also above expectations, with projected revenues of $7.4 billion and EPS of $0.90, compared to the consensus forecast of $7.22 billion and $0.88 EPS, respectively. This projection excludes a one-time inventory charge and reflects the removal of $700 million in MI308 Instinct guided revenues due to the GPU embargo in China.
The embargo is expected to result in a total negative impact of $1.5 billion for the calendar year 2025, with an anticipated $500 million impact in the third quarter and $300 million in the fourth quarter. Despite this, AMD has reiterated its expectation for strong double-digit growth in the DC Instinct segment for the entire year. Cantor Fitzgerald’s revised model now anticipates $6.0 billion in revenue for this segment in 2025, indicating a 17% growth, followed by an increase to $8 billion in 2026, bolstered by the ramp-up of MI400 and rack scale products.
The analysts at Cantor Fitzgerald have adjusted their revenue model for AMD’s DC Instinct segment from a previous estimate of $5.5 billion to $6.0 billion for the year 2025, reflecting their confidence in the company’s growth trajectory despite the challenges posed by the embargo. The firm’s analysis suggests that AMD is well-positioned to navigate through the current uncertainties and continue its growth in the coming years. InvestingPro data supports this outlook, showing a "GOOD" overall financial health score and strong operational metrics, including a healthy current ratio of 2.62. For deeper insights into AMD’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Advanced Micro Devices (AMD) reported strong quarterly financial results, with earnings of $0.96 per share on revenue of $7.44 billion, surpassing analyst estimates. The company’s non-GAAP gross margin was 53.7%, slightly above projections, while its operating expenses were higher than expected at $2.21 billion. AMD’s cash reserves increased to $7.31 billion, partly due to the issuance of $1.5 billion in debt for the acquisition of ZT Systems. Truist Securities and Northland both adjusted their price targets for AMD, with Truist cutting it to $111 and Northland reducing it to $132, citing various market factors and AMD’s strategic decisions.
Despite potential revenue impacts from the China market exit, AMD’s Client and Gaming sectors performed well, with revenue exceeding estimates. Stifel analysts maintained a Buy rating with a $132 target, expressing confidence in AMD’s growth potential, particularly in AI computing. Evercore ISI also upheld an Outperform rating, highlighting AMD’s Data Center GPU business expansion and the anticipated growth of its Instinct product line. KeyBanc maintained a Sector Weight rating, noting AMD’s strong start to the year but expressing caution about potential impacts from the China AI chip ban.
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