Shares of Advanced Micro Devices (AMD) rose 10.3% in after-hours on Tuesday, thanks to the better-than-expected 2Q earnings and upbeat guidance. Its earnings of $0.18 per share marked a whopping 125% year-over-year growth and beat analysts’ estimates of $0.16.
Revenues grew 26% to $1.93 billion year-over-year and surpassed Street estimates of $1.86 billion. Strong chip demand by PC manufacturers and data center operators drove AMD’s 2Q revenues and earnings.
The company raised its full-year revenue growth outlook. It now expects revenues to increase by 32% in 2020 compared with its earlier expectations of 25% growth.
Following the financial results, Piper Sandler analyst Harsh Kumar raised the stock’s price target to $82 (21% upside potential) from $60 and maintained a Buy rating. Credit Suisse analyst John Pitzer increased the price target to $75 (11% upside potential) from $33, while reiterating a Hold.
On July 27, Merrill Lynch analyst Vivek Arya ramped up the stock’s price target to $77 from $65 and reiterated a Buy rating. Arya believes Intel’s (INTC) 7-nanometer product delay “could accelerate AMD market share gains back toward their historical peaks of 20% for PC and 25% servers, up from 17% and 10%, today.”