Last Minute Thought: Buy or Sell AMD Stock Before Earnings?

All eyes last week have been drawn to the tech giants’ earnings but this week has some big names reporting too; after the market closes today, Advanced Micro Devices (AMD) will grab hold of the earnings mic to deliver Q2’s results.

Will it be a “drop the mic” quarter? Not quite, says Deutsche Bank’s Ross Seymore.

“Overall, we expect AMD to deliver a solid print in its first quarter since its Analyst Day and since re-segmenting revenues,” says the 5-star analyst. “While we do still view AMD’s CY22 guidance to be attainable, we recently lowered our 2H22 forecast and 2023/2024 outlooks to reflect the softening macro environment.”

The short-term issues currently center on the waning demand in PC/CPUs, but Seymore thinks that even Data Center - which has so far been immune to the macro developments - will take a tumble eventually, although AMD’s share gains in the segment will be able to “somewhat offset” the overall anticipated weakness.

Seymore might be heeding caution, but as far as expectations for the quarter go, his are at the high end.

The analyst is calling for revenue of $6.61 billion (up 72% year-over-year), above the mid-point of guidance ($6.3-6.7 billion) and higher than the Street’s $6.53 billion forecast. Likewise for the bottom-line, Seymore is calling for EPS of $1.07, a touch above consensus at $1.05.

For Q3, Seymore expects AMD will guide for revenues of $6.82 billion, amounting to a 58% year-over-year uptick and “in line” with the Street’s forecast of $6.81 billion. Seymore, as does the Street, expects EPS of $1.10.

“Overall,” the analyst wraps up, “heading into a challenging macroeconomic environment we remain encouraged AMD can gain share/grow due to its strong product line-up (and due to weaker competitive pressures in the medium term as its primary competitor attempts to regain its footing).”

That said, with shares are now trading 14% above his recently revised $85 price target and given investors are “less willing to stomach growth names in the current market,” heading into the print, Seymore sticks with a Hold (i.e. neutral) rating. (To watch Seymore’s track record, click here)

7 other analysts join the Deutsche Bank expert on the sidelines, but with an additional 18 Buys, the stock claims a Moderate Buy consensus rating. The average price target is far more bullish than Seymore allows; at $127.43, the figure makes room for 12-month gains of 42%. (See AMD stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
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