Advanced Micro Devices, Inc. AMD saw its shares surge in its stock price following its second-quarter earnings report, which exceeded expectations.

The semiconductor giant reported earnings of $0.69 per share, surpassing the consensus estimate of $0.68, and sales of $5.835 billion, also ahead of the $5.724 billion forecast.

Here's how analysts from top firms reacted to AMD's latest performance.

BofA Securities: Cautious Optimism Amidst Rising Costs

BofA Securities analyst Vivek Arya maintains a Buy rating but revises the price target down to $180 from $195.

Arya praises AMD's performance, highlighting strong AI investments and recovery in PC/server markets. However, he notes rising operational expenses and only modest margin expansion as potential concerns.

Arya expects AMD to grow its sales by 23% YoY in CY24 but warns that near-term consensus expectations might be overly optimistic given the rising cost profile.

JPMorgan: Strong Data Center Growth Fuels Optimism

JPMorgan analyst Harlan Sur keeps a Neutral rating with a $180 price target for AMD.

Sur lauds AMD’s impressive second-quarter performance, driven by a 21% sequential rise in data center revenues and better-than-expected PC client shipments. He notes AMD's increased CY24 data center GPU outlook to over $4.5 billion, citing improved supply chain dynamics.

Sur anticipates continued growth in data center and PC segments but a decline in gaming revenue and modest growth in embedded.

Goldman Sachs: Data Center Growth Drives Future Prospects

Goldman Sachs analyst Toshiya Hari keeps a Buy rating with a 12-month price target of $175.

Hari views AMD’s robust data center GPU traction and improving server CPU market share positively.

While acknowledging potential near-term margin pressures due to increased AI investments, Hari is optimistic about AMD’s growth trajectory, especially in data center GPUs and enterprise servers.

He expects AMD to continue outperforming competitors like Intel Corp INTC and NVIDIA Corp NVDA.

Cantor Fitzgerald: Adjusted Price Target Reflects Market Realities

Cantor Fitzgerald analyst C.J. Muse lowers the price target to $180 from $200 but remains Overweight on the stock.

Muse is encouraged by AMD's raised MI300 revenue outlook to over $4.5 billion and strong performance in server CPUs. He notes that while investor fears about MI300 demand may have been overstated, the company’s gaming and embedded businesses are experiencing challenges.

Muse expects AMD to benefit from robust server CPU and client CPU growth despite a more muted outlook for gaming.

KeyBanc Capital Markets: Positive Outlook Driven by MI300

KeyBanc Capital Markets analyst John Vinh maintains an Overweight rating, bolstered by AMD's strong second-quarter results and raised MI300 revenue outlook. The price target is $220.

Vinh highlights the continued growth in traditional server markets and above-seasonal PC demand driven by new product launches.

While noting weaker projections for embedded and gaming segments, he is optimistic about AMD's overall performance and growth potential in the AI and server markets.

Wedbush Securities: Bullish on AI and Market Position

Wedbush Securities analyst Matt Bryson reiterates an Outperform rating with a price target of $200.

Bryson is impressed by AMD's performance, particularly the strong growth in MI300 sales and the revised 2024 revenue outlook.

He views AMD as a major contender in the AI GPU market, with potential to surpass expectations in 2025. Bryson remains positive about AMD's growth in server compute and PC sales, despite challenges from competitors.

Oppenheimer: Cautious Amidst Market Pressures

Oppenheimer analyst Rick Schafer maintains a Perform rating, citing AMD's mixed outlook and the potential dilution of its AI growth story by low-growth segments like PC and gaming.

Schafer notes that while AMD’s AI product ramp is impressive, ongoing challenges in gaming and embedded markets temper his optimism. He remains cautious about AMD's ability to sustain profitability in a competitive landscape.

Truist Securities: Concerns Over Market Position

Truist Securities analyst William Stein raises the price target to $156 but stays at a Hold rating.

Stein acknowledges AMD’s raised AI GPU guidance and solid data center growth but remains concerned about AMD's competitive positioning compared to Nvidia.

He highlights potential pressures from new CPU competitors and maintains a cautious stance on AMD's long-term prospects.

ROTH • MKM: Confident in AI Momentum

ROTH • MKM analyst Suji Desilva continues with a Buy rating and a price target of $200.

Desilva is encouraged by AMD's raised AI GPU revenue expectations and broadening traction in data center and client segments. Despite challenges in gaming and embedded markets, Desilva remains confident in AMD's ability to deliver strong growth and maintains a positive outlook on its AI and data center businesses.

AMD’s second-quarter earnings report has received a range of reactions from analysts, reflecting a mix of optimism about the company’s AI and data center growth, tempered by concerns over rising costs and competitive pressures.

Most analysts remain positive about AMD's long-term prospects, with some adjusting their price targets to reflect current market conditions and future expectations.

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