AMD 2024: What to expect
Dec. 19, 2023 8:47 AM ET
By: Chris Ciaccia, SA News Editor
 JHVEPhoto
AMD (NASDAQ: AMD) shares have surged in 2023, following a difficult 2022 in which shares fell nearly 65%. However, there are some concerns about the semiconductor giant's valuation and growth, especially as it looks to move into artificial intelligence and compete with Nvidia ( NVDA).
2023 Stock Performance
AMD shares have climbed 116% in 2023 and hit a 52-week high of $139.89 this month. Over the past six months, amid optimism surrounding the PC market and the company's AI prospects, shares have climbed more than 11%.
Over a five-year timeframe, AMD ( AMD) shares have done even better, having soared compared to the broader averages and gained more than 590%
.
What Quantitative Measures Say
AMD ( AMD) receives a Hold rating from Seeking Alpha's Quant Rating system. This comes in large part due to a D- grade for valuation, down from a D+ three months ago. The stock receives a B+ for growth, down from the A- three months ago.
Conversely, AMD receives an B+ for profitability, an A for momentum and a D+ for revisions.
What Wall Street Says
Sell-side analysts are becoming increasingly optimistic on AMD ( AMD). Of the 47 analysts surveyed by Seeking Alpha in the past 90 days, 26 of them have a Strong Buy rating and 8 have a Buy rating, while 13 have a Hold rating. That means roughly 87% of analysts are somewhat positive on the stock and the company's future.
Seeking Alpha author Bluesea Research believes that AMD ( AMD) is likely to benefit from the partnerships it has signed with big tech companies like Microsoft ( MSFT) and Meta ( META) for its AI chips.
"AMD provides a good enough alternative for Big Tech companies who do not want to get completely dependent on a single supplier, which is Nvidia," Bluesea Research wrote. "This dynamic will play out over the next few years as AMD continues to increase its market share within the AI industry, helping build a strong momentum in the stock."
However, AMD ( AMD) does have some detractors amongst the community, especially at the current valuation.
Seeking Alpha author Star Investments said AMD ( AMD) has not quite reached the area where it can be bought just yet.
"In my opinion, there needs to be more than a potential return of 7% by 2024 for new investors to jump into the stock currently," Star Investments wrote. "There may be a better value to buy AMD over the next year."
Latest Earnings
In its most recent earnings report, AMD ( AMD) reported third-quarter results that topped expectations. It earned an adjusted 70 cents per share on $5.8B in revenue, as data center revenue came in at $1.6B, up 21% sequentially and client revenue rose 42% year-over-year to $1.5B, aided by Ryzen 7000 Series CPU sales
Earnings Predictions
Meanwhile, analysts expect the company to earn an adjusted 58 cents per share on revenue of roughly $5.61B. In the same period in 2022, AMD earned an adjusted 69 cents per share on $5.6B in revenue. |
