Amid strong demand for personal computers around the world, Advanced Micro Devices is set to issue its latest quarterly report card Tuesday after the closing bell.
Days after Intel (ticker: INTC) beat overall expectations largely on the back of better-than-expected PC sales, AMD (AMD) appears ready to repeat its success. Investors are expecting the company’s computer and graphics segment to generate first-quarter revenue of $1.92 billion, up from $1.44 billion in the year-ago period.
BMO Capital Markets analyst Ambrish Srivastava wrote in a note that his team observed that beyond solid demand for PCs, the market for graphics chips that AMD produces was also strong in the first quarter. The analyst expects graphics processor unit, or GPU, revenue to rise 6%.
AMD’s personal computer processor sales could improve over the year. Atlantic Equities analyst Ianjit Bhatti wrote in a note to clients that AMD’s sales were held back by supply constraints at the end of last year. Bhatti said that is changing, and he expects Taiwan Semiconductor Manufacturing (TSM), which makes the chips AMD designs, to ramp up its capacity through the year.
Intel ‘s declining data center sales, however, raise some questions for investors. Susquehanna Financial Group analyst Christopher Rolland wrote that there is uncertainty heading into earnings, but overall he expects AMD to beat expectations, and raise its guidance.
“With AMD’s end markets firing on all cylinders, investors will be laser focused on commentary around their ability to source wafers at TSMC, perhaps the most important data point this report,” Rolland wrote.
UBS analyst Timothy Arcuri also wrote that he expects AMD to raise its full-year guidance.
Analysts model revenue of $1.29 billion for the enterprise, embedded and semi-custom segment; the semi-custom component of the business includes the chips AMD designed for the latest videogame consoles made by Sony (SNE) and Microsoft (MSFT).
Overall, analysts expect adjusted earnings of 44 cents a share, and revenue of $3.21 billion.
Of the analysts that cover AMD, 60% rate the stock a Buy, 12 have a Hold, and four give it a Sell rating. The average target price is $101.32, which implies an upside of about 19%.
AMD shares rose 3.4% to $85.54 in Monday afternoon trading. The stock advanced 52% in the past year, as the PHLX Semiconductor index rose 91%.
The company is expected to host a conference call for analysts at 5 p.m. Eastern time.
Write to Max A. Cherney at max.cherney@barrons.com
April 27, 2021 at 02:10AM
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