Asia FX muted, dollar fragile as CPI data boosts Sept rate cut bets
On Friday, Mizuho (NYSE:MFG) Securities revised its price target for AMD (NASDAQ:AMD) stock, reducing it from $140.00 to $120.00, while reaffirming its Outperform rating. The adjustment was made in light of anticipated headwinds affecting AMD’s growth in the artificial intelligence (AI) sector, particularly challenges in securing Chip-on-Wafer-on-Substrate (CoWoS) share. Currently trading at $98.11, near its 52-week low of $94.73, InvestingPro analysis suggests AMD is slightly undervalued. Despite these challenges, Mizuho believes that AMD’s prospects in the server and PC markets remain strong and could serve as key drivers for the company’s performance, particularly given the company’s solid financial health score and moderate debt levels.
The firm’s analyst noted that there are no changes to the March quarter revenue and earnings per share (EPS) estimates, which remain at $7.10 billion and $0.95, respectively. These figures are in line with the consensus estimates of $7.10 billion in revenue and $0.94 EPS. However, the forecast for fiscal year 2025 has been lowered from $32.2 billion in revenue and $5.00 EPS to $31.9 billion and $4.70, closely aligning with the consensus of $31.9 billion in revenue and $4.66 EPS. InvestingPro data shows AMD’s expected revenue growth of 23% for FY2025, with 17 analysts recently revising their earnings estimates downward.
Looking further ahead, the fiscal year 2026 estimates have also been adjusted. Previously, revenue and EPS were projected at $39.1 billion and $7.00, respectively. The new forecast is set at $38.3 billion in revenue and $6.33 EPS, compared to the consensus of $38.4 billion and $6.29 EPS.
The valuation multiple applied to AMD’s forecasted 2026 earnings has been slightly reduced from 20.0 times to 19.0 times. Despite the dominant position of NVIDIA (NASDAQ:NVDA) in the merchant GPU market, Mizuho’s outlook for AMD is positive, emphasizing the potential for share gains in the traditional server and PC markets as significant positive factors for the company’s future.
In other recent news, Advanced Micro Devices, Inc. (AMD) has been in the spotlight with several notable developments. The company announced the release of its latest graphics cards, the Radeon RX 9070 XT and RX 9070, which are part of the Radeon RX 9000 Series. These new GPUs are designed with AMD RDNA 4 graphics architecture and promise significant performance improvements, including enhanced raytracing and AI acceleration capabilities. In financial news, AMD executives, including CEO Lisa T. Su, have received substantial performance bonuses for 2024, reflecting the company’s achievements over the past fiscal year.
Moreover, AMD is reportedly in discussions to sell its data center manufacturing plants for an estimated $3 billion to $4 billion, with potential buyers including several Taiwanese firms. This potential sale could be announced as early as the second quarter, although discussions are still ongoing. On the analyst front, JPMorgan has maintained a Neutral rating on AMD, with a price target of $130, citing confidence in AMD’s growth prospects, particularly in server CPUs and AI GPUs. The firm projects a double-digit growth percentage for AMD in 2025, driven by market share gains and new product launches.
Additionally, AMD’s AI GPU business is expected to grow over 60% this year, supported by significant orders from clients like Oracle (NYSE:ORCL). These developments underscore AMD’s strategic moves in the semiconductor industry, including the launch of new products and potential restructuring of its data center operations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.