7 AMD Analysts Deep Dive Into Q4 Print: 'Expectations Are Reaching A Fever Pitch'

Shares of Advanced Micro Devices, Inc. AMD declined in early trading on Wednesday, after the Santa Clara, California-based company reported its quarterly results.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.

• Northland Capital Markets analyst Gus Richard upgraded the rating to Outperform, while establishing a price target of $195.
• Truist Securities analyst William Stein reiterated a Hold rating, while lifting the price target from $154 to $174.
• KeyBanc Capital analyst John Vinh reaffirmed an Overweight rating, while raising the price target from $195 to $270.
• Bernstein analyst Stacy Rasgon maintained a Market Perform rating, while raising the price target from $120 to $140.
• Wedbush analyst Matt Bryson reiterated an Outperform rating and price target of $200.
• Bank of America Securities analyst Vivek Arya reaffirmed a Buy rating and price target of $195.
• Oppenheimer analyst Rick Schafer maintained a Perform rating on the stock.

Check out other analyst stock ratings.

Northland Capital Markets: There is weak demand for chips except for non-AI products, while the expectations for AI chips are high, Richard said. “We expect demand to improve for non AI products throughout the year, and based on AMD's strong execution there is likely still some upside to our AI forecast,” he added.

“Customers are desperate” for a second source to Nvidia Corp NVDA, Richard stated.

Truist Securities: Advanced Micro Devices reported its fourth-quarter results in-line with expectations, while first-quarter guidance “was weak on gaming & embedded,” Stein said.

“Most important: while it may not have been the magnitude of upside that some were expecting, mgmt raised its 2024 DC AI accelerator guidance from $2B to $3.5+B, and established a $400B TAM estimate,” he added.

KeyBanc Capital Markets: “While Data Center GPUs exceeded 4Q guidance of $400M with 2024 expectations raised to $3.5B from $2B, this was offset by weak traditional server demand, continued destocking in Embedded, and weak Gaming,” Vinh wrote in a note.

“While disappointed with non-GPU results, we're encouraged with the strong GPU revs and commentary,” he added.

Bernstein: Advanced Micro Devices announced disappointing first-quarter guidance, “with all segments implied below consensus with particular downside in gaming and Embedded on substantial inventory flush,” Rasgon said.

“Expectations for AMD have been climbing seemingly every day, with bullish investor outlook especially for the datacenter GPU ramp reaching a fever pitch in recent weeks and months,” the analyst wrote. “In that context, perhaps resetting those expectations to something more reflective of potential reality is not necessarily a bad thing,” he added.

Wedbush: The earnings call “wasn't about Q4 results or the company's Q1 outlook,” focusing solely on “commentary regarding the success of AMD's AI efforts and any color management might provide around the future outlook for AI sales,” Bryson said.

With AI-related expectations rising over the past few months, “even with AMD lifting its outlook for MI300/AI silicon sales in 2024 to north of $3.5B, the stock dipped significantly on the revised outlook,” he added.

BofA Securities: “Weak outlook is primarily in programmable chips, gaming and PC, deeper than expected,” Arya wrote in a note.

He added that the most important aspects of the performance were Advanced Micro Devices’ data center being “strongly on track,” suggesting continued share gains against Intel Corp INTC, and the start of AI ramp and positioning against Nvidia.

Oppenheimer: “Mgmt raised MI300 revenue expectation for 2024 from $2B to $3.5B on improved order velocity," Schafer said. “We believe buy-side expectation may be close to 2x higher,” he added.

“GM down 30bps to 50.8% but guided up 120bps Q/Q to 52% in 1Q,” the analyst wrote. “We see potential for some GM expansion through the year on mix as low-margin gaming declines DD% and high-margin DC ramps,” he further stated.

AMD Price Action: Shares of Advanced Micro Devices had declined by 3.82% to $165.48 at the time of publication on Thursday.