AMD’s Sales Outlook Tops Estimates As 4Q Profit Jumps 63%

Advanced Micro Devices reported better-than-expected 4Q results. Adjusted earnings per share soared 63% during the quarter to $0.52 year-on-year. The bottom-line results of the semiconductor company also surpassed analysts’ expectations of $0.47.

AMD’s (AMD) 4Q sales jumped 53% to $3.24 billion and beat the Street’s estimates of $3.02 billion. Revenues at its computing and graphics division grew 18% year-over-year mainly driven by strong sales of Ryzen processors.

The enterprise, embedded and semi-custom segment recorded revenue growth of 176% primarily benefiting from strong sales of semi-custom and EPYC (extreme performance yield computing) processors. (See AMD stock analysis on TipRanks).

AMD’s 1Q and 2021 revenue outlook came in higher than analysts’ expectations. For 1Q, the company projects sales of about $3.2 billion, while analysts had been looking for sales of $2.73 billion. For 2021, it anticipates revenue growth of nearly 37% versus the consensus estimate of a 27.7% increase.

Following the earnings release, Mizuho Securities analyst Vijay Rakesh raised the price target to $105 (10.9% upside potential) from $102 and reiterated a Buy rating. In a note to investors, Rakesh wrote, “DecQ saw positive demand trends across all end-markets, with the MarQ guide noting strength in Cloud, PC and gaming consoles offsetting some seasonal weakness.”

The rest of the Street is cautiously optimistic on the stock. The Moderate Buy analyst consensus is based on 15 Buys, 6 Holds, and 2 Sells. The average analyst price target of $98.30 implies upside potential of about 3.8% to current levels. Shares have gained about 88.1% over the past year.

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