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Investing.com - KeyBanc has reiterated its Sector Weight rating on Advanced Micro Devices (NASDAQ:AMD), a $266.3 billion market cap semiconductor giant, following the company’s strong second-quarter results and third-quarter guidance. According to InvestingPro data, AMD has demonstrated robust growth with revenue increasing 27.17% over the last twelve months.
The semiconductor company reported second-quarter revenue that exceeded expectations, while earnings per share were in line with forecasts despite higher operating expenses. KeyBanc noted that server and gaming segments drove the second-quarter performance. InvestingPro analysis shows AMD maintains strong financial health with a "GOOD" overall rating, supported by its ability to cover short-term obligations with a current ratio of 2.49.
AMD’s third-quarter guidance shows strength primarily from the meaningful ramp-up of its MI355 AI GPU, while server CPU business is also expected to grow double digits quarter-over-quarter. The company indicated that AI GPUs would return to year-over-year growth in the third quarter.
KeyBanc highlighted that neither second-quarter results nor third-quarter guidance include any contribution from MI308, as AMD still awaits approval to ship this product to China. With mass production beginning in June, the implied third-quarter revenue for AI GPUs is approximately $1.7 billion, representing about 60% quarter-over-quarter growth.
Following these results, KeyBanc has adjusted its 2025 estimates and modestly raised projections for 2026, while maintaining its Sector Weight rating on AMD stock. The company’s shares have surged 58.23% over the past six months, though InvestingPro’s Fair Value analysis suggests the stock is currently trading slightly above its fair value. For deeper insights into AMD’s valuation and growth prospects, check out the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Advanced Micro Devices (AMD) reported its second-quarter revenue of $7.69 billion, surpassing consensus estimates of $7.42 billion. This figure represents a 32% year-over-year increase and exceeded Street expectations by $270 million, even with an estimated $700 million loss in revenue from China due to export restrictions. The company also reported earnings per share of $0.48, in line with expectations. AMD has provided guidance for third-quarter revenue of approximately $8.7 billion, slightly above the consensus forecast of $8.3 billion. Analysts from Benchmark, Cantor Fitzgerald, and Mizuho (NYSE:MFG) have all maintained or raised their price targets on AMD, reflecting optimism in the company’s performance and AI growth. New Street Research has notably increased its target to $230, citing momentum in AMD’s Instinct AI accelerator business. Mizuho has highlighted strong PC/Client growth and the data center Instinct MI350 ramp-up as key drivers for future revenue. Meanwhile, JPMorgan raised its price target to $180, maintaining a Neutral rating, with the company’s recent performance driven by better client and gaming revenues.
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