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On Wednesday, Seaport Global Securities began coverage on shares of AMD (NASDAQ:AMD) with a positive outlook, assigning a Buy rating and setting a price target of $110.00. The firm’s analyst cited AMD’s consistent performance and ability to gain market share as key factors for the favorable rating. With a current market capitalization of $155.26 billion and revenue growth of ~14% in the last twelve months, AMD shows strong momentum. InvestingPro analysis indicates the stock is currently trading below its Fair Value, suggesting potential upside opportunity.
AMD has been successfully challenging Intel (NASDAQ:INTC)’s long-standing dominance in the PC market and has recently surpassed Intel in data center market share. The company’s progress was highlighted by Seaport Global Securities as a testament to its strategic execution, particularly in light of Intel’s recent struggles. InvestingPro data shows AMD maintains a healthy financial position with a current ratio of 2.62, indicating strong ability to meet short-term obligations. The company’s overall financial health score is rated as GOOD by InvestingPro analysts.
In the highly competitive field of artificial intelligence (AI), AMD has developed a credible AI product that contends with Nvidia (NASDAQ:NVDA)’s offerings. While AMD’s AI product is seen as competitive, the analyst noted that AMD does not yet have the extensive portfolio of software and system services that Nvidia offers. However, AMD is actively working to enhance its capabilities in this area, as evidenced by its acquisition of ZT Systems. The company maintains a strong gross profit margin of 53%, demonstrating efficient operations despite intense competition. Want deeper insights? InvestingPro offers 12 additional key tips about AMD’s performance and potential.
Despite the challenges, the analyst emphasized that AMD’s growth in AI should be viewed with the understanding that it will likely be modest but increasing over time. The focus for AMD, according to Seaport Global Securities, should be on the company’s execution in adhering to its product roadmap rather than immediate AI sales figures.
The initiation of coverage and the optimistic price target reflect Seaport Global Securities’ confidence in AMD’s strategic direction and its potential for continued market share expansion. The firm’s analysis suggests that AMD’s efforts to build out its data center AI capabilities are expected to yield benefits in the long term, contributing to the company’s overall growth trajectory.
In other recent news, Advanced Micro Devices, Inc. (AMD) is preparing to showcase its advancements in artificial intelligence at Computex 2025, emphasizing its role in gaming, personal computers, and professional workloads. Meanwhile, Bernstein analysts have adjusted their outlook on AMD, maintaining a Market Perform rating but lowering the price target to $95 from $125 due to uncertainties in the AI sector and new licensing requirements in China. Additionally, JPM analysts have highlighted a significant financial impact for AMD, projecting a $1.5 to $1.8 billion revenue hit, partly due to an $800 million inventory charge.
In collaboration with Stable Diffusion, AMD has optimized its Radeon GPUs and Ryzen AI APUs to run Stable Diffusion models more efficiently, enhancing performance without sacrificing quality. Despite regulatory changes affecting the semiconductor industry, Wells Fargo (NYSE:WFC) has reiterated its Overweight rating on AMD with a $140 price target, although it acknowledged potential financial impacts from new U.S. government licensing requirements for GPU sales to China. AMD is expected to incur an $800 million charge related to inventory and purchase commitments, reflecting these regulatory challenges.
These developments come as AMD approaches its quiet period before releasing its first-quarter earnings on May 6, 2025. Investors and industry observers are closely watching for further insights into how these factors will influence AMD’s financial health and strategic direction.
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