From Nasdaq: 2024-08-04 07:30:00

Semiconductor company AMD reported Q2 earnings with total revenue growing by just 9% year over year due to declines in gaming and embedded segments. However, signs of increased competitiveness in AI signal potential for overall growth. Shares are down over 30%, presenting a buying opportunity with multiple growth prospects ahead.

AMD’s AI business had a strong quarter, but struggles in gaming and embedded segments held back total revenue growth to 9% year over year. Gaming is cyclical, while the embedded segment is recovering from high inventory levels. However, growth is expected to accelerate as other segments expand.

AMD’s AI growth potential is significant, with data center revenue increasing 115% year over year in Q2. The client segment also saw a 49% revenue growth. AMD has opportunities to gain market share from Nvidia and capitalize on the growing AI chip demand.

Stock Advisor analysts forecast an average 33% annual earnings growth for AMD over the next 3-5 years. With a forward P/E ratio of 40, the stock offers value if growth expectations are met. Accelerating data center growth is a positive indicator for potential investors eyeing the stock.

Considering AMD’s growth outlook and AI potential, the recent drop in share price presents an attractive buying opportunity. Analysts project strong earnings growth, positioning AMD favorably in the market. Investors seeking high growth potential may find AMD’s stock a compelling option at its current valuation.



Read more at Nasdaq: Is Advanced Micro Devices (AMD) Stock a Buy Now?