Market Overview

Credit Suisse: What To Expect From AMD's Upcoming Q1 Report

Credit Suisse: What To Expect From AMD's Upcoming Q1 Report

Advanced Micro Devices, Inc. (NASDAQ: AMD) is scheduled to report first-quarter results after Wednesday's close that could come in ahead of consensus estimates, according to Credit Suisse. 

The Analyst

Credit Suisse's John Pitzer maintains a Neutral rating on AMD's stock with an unchanged $13.50 price target.

The Thesis

Pitzer is modeling AMD to report the following in its Q1 print: 

  • Revenue of $1.75 billion and EPS of 12 cents versus consensus estimates of $1.55 billion and 8 cents per share.
  • Cryptocurrency-related revenue likely drove $150 to $200 million of upside to revenue estimates.
  • Client MPU revenue likely rose 5 percent quarter-over-quarter, driven by flat unit growth in Ryzen and a 5-percent increase in average selling price.
  • Enterprise, embedded and semi-custom revenue likely rose 40 percent from the prior quarter, in-line with new seasonality trends.
  • Interest, taxes and other expenses of $30 million.
  • Management is likely to guide its second-quarter revenue and EPS to be in-line with the Street's current estimate of $1.59 billion and 10 cents per share.

Despite expectations for a positive Q1 result, the analyst said upside to estimates over the near-term are not sustainable for the following reasons:

  • Ongoing price volatility in cryptocurrencies that make mining less economical.
  • Competing products are set to be introduced to the market like Bitmain's Ethereum ASIC.
  • Margin benefits from Ryzen are in "mid to later innings."
  • Momentum in Epyc likely peaked four months ago.

Price Action

AMD shares were trading up 0.25 percent at $10 at the time of publication Monday afternoon. 

Related Links:

Forget Crypto: eSports Might Be Where It's At For Nvidia And AMD

An AMD Vs. Intel Pair Trade

Latest Ratings for AMD

Aug 2019Initiates Coverage OnNeutral
Aug 2019Initiates Coverage OnHold
Aug 2019Initiates Coverage OnHold

View More Analyst Ratings for AMD
View the Latest Analyst Ratings

Posted-In: Analyst Color Cryptocurrency Earnings News Price Target Previews Reiteration Markets Best of Benzinga


Related Articles (AMD)

View Comments and Join the Discussion!

Understanding Liquidity In Commodities

Barclays: Verizon A Buy Despite DOJ Probe