Shares of Advanced Micro Devices (AMD) are down in after-hours trading after the chipmaker reported Q4 earnings results. Earnings per share came in at $1.09, which slightly beat analysts’ consensus estimate of $1.08. In addition, sales increased by 24.2% year-over-year, with revenue hitting $7.7 billion. This beat analysts’ expectations of $7.53 billion.
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This increase in sales was primarily driven by its Data Center segment, which saw revenue jump by 69% year-over-year to $3.9 billion. The main cause of this jump was a steep increase in Instinct GPU shipments, along with strong growth in AMD EPYC CPU sales.
However, its Gaming segment saw a 59% year-over-year decrease to $563 million. This was due to a reduction in semi-custom revenue, which involves designing and manufacturing customized chips tailored to the specific needs of individual customers.
Guidance for Q1 2025
Looking forward, management has provided the following guidance for Q1 2025:
- Revenue of between $6.8 billion and $7.4 billion versus analysts’ estimate of $6.99 billion
- Non-GAAP gross margin of approximately 54%
As we can see, the company’s revenue outlook at the midpoint of $7.1 billion was better than analysts’ expectations. It also slightly beat on EPS and comfortably exceeded revenue estimates. So, why is the stock down? It could be because the stock rallied 4.6% in today’s trading ahead of the earnings release, and investors decided to take a profit.
Is AMD a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on AMD stock based on 15 Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 31% rally in its share price over the past year, the average AMD price target of $159.91 per share implies 33.7% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.
