From Nasdaq: 2024-05-08 10:30:00

Advanced Micro Devices (AMD) is facing a rough patch in 2024, with shares down 29% since March. First-quarter results disappointed investors, with revenue up only 2% to $5.47 billion and earnings at $0.62 per share. However, AMD’s data center and client businesses are flourishing thanks to AI, hinting at future growth potential.

In the data center segment, AMD saw record revenue of $2.3 billion, an 80% increase driven by AI GPU and server processor demand. The company expects $4 billion in data center GPU revenue for 2024, double its original forecast, suggesting continued growth. The client business also thrived, with a revenue increase of 85% to $1.4 billion due to AI-enabled PCs.

Although AMD’s gaming and embedded segments struggled with significant revenue declines, the company’s AI-focused businesses are expected to drive top-line growth in the coming years. Analysts forecast a 25% annual increase in earnings for the next five years, pointing toward a potential stock price increase of 78% by 2028. Investors are urged to view AMD’s current setback as a buying opportunity for long-term growth potential.



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