5 AMD Analysts Weigh In On Blowout Q1 Earnings: Why 2 Reduced Price Targets

Advanced Micro Devices, Inc. AMD reported first-quarter earnings after the bell on Tuesday.

The chipmaker posted sales growth of 71% and year-over-year earnings growth of 117%.. The company raised its revenue guidance for the full year to about $26.3 billion, up about 60% from 2021, driven by the addition of Xilinx and higher server and semi-custom revenue.

KeyBanc Capital Markets On Advanced Micro Devices: Analyst John Vinh maintained an Overweight rating on AMD and reduced the price target from $165 to $150.

“Server growth remains strong, with both cloud and enterprise more than doubling y/y,” Vinh said in a note.

Despite weakening PC demand, Advanced Micro Devices expects its client PC revenues to grow in 2022, “driven by mix shift to premium and gaming segments, where the company sees resilience and continues to gain share,” he added.

Expectations for growth and share gains are elevated, Vinh said. 

“We're concerned that any moderate downtick to expectations could add substantial risk to the stock based on valuation levels well above peers.”

Rosenblatt Securities On Advanced Micro Devices: Analyst Hans Mosesmann maintained a Buy rating on AMD with a $200 price target. 

“AMD crushed it for 1Q22 on broad-based data center, client share gains, and the addition of Xilinx,” Mosesmann said in a note.

“Xilinx brings a portfolio of products and IP that make AMD a juggernaut with “both” extremely strong CPU and GPU roadmaps (something Intel and Nvidia cannot offer in the near-term), with a kicker in programmable solutions and platform DPU specialization coming from the new Pensando acquisition,” he wrote.

Raymond James On Advanced Micro Devices: Analyst Chris Caso reiterated a Strong Buy rating and $160 price target.

“Full quarter XLNX revenue implies a 22% y/y growth rate, further incremental gains are expected in 2H as supply improves, and they confirmed the transaction will be accretive this year,” Caso said in a note.

He raised RayJay's earnings estimates for 2022 and 2023 from $3.98 per share to $4.35 per share and from $4.85 per share to $4.94 per share, respectively.

Benchmark On Advanced Micro Devices: Analyst Cody Acree maintained a Buy rating for the company and reduced the price target from $145 to $125.

“Beyond its strength in servers and the data center, AMD also benefitted from strong semi-custom demand from its game console customers, primarily Sony and Microsoft, although Valve’s Steam Deck was also said to be a strong contributor,” Acree said in a note.

Benchmark's price target has been revised lower “to account for the multiple contraction we’ve seen across the broader semiconductor market,” he said. 

Wells Fargo On Advanced Micro Devices: Analyst Aaron Rakers reiterated an Overweight rating and $140 price target. 

“AMD's results and outlook reinforced our positive preview call — i.e., continued AMD data center momentum will outweigh concerns over PC deceleration; belief that AMD is on a path to +$6 EPS by 2025,” Rakers said in a note.

The analyst raised the earnings estimates for 2022, 2023 and 2024 from $3.96 per share to $4.32 per share; from $4.54 per share to $4.77 per share; and from $5.03 per share to $5.17 per share, respectively.

AMD Price Action: Shares of Advanced Micro Devices were trading 2.29% higher at $93.22 Wednesday morning, according to Benzinga Pro.