AMD stock saw a 10% drop despite solid Q3 results, but is positioned for growth in AI market.

From Nasdaq: 2024-11-06 05:12:00

Advanced Micro Devices (AMD) investors have had a tough year, with stock down 4% while the semiconductor sector saw gains of 20%. Despite solid Q3 results with revenue up 18% and earnings per share up 31%, AMD’s progress in the AI chip market disappointed Wall Street, leading to a 10% stock drop.

However, AMD’s data center GPU business is growing, with $3.5 billion in revenue last quarter and expectations to reach $5 billion by year-end. The company’s AI chip revenue estimates are rising, with new products like the MI325X GPU and plans for future chip launches, positioning AMD for growth in the AI market.

AMD’s guidance for the current quarter points towards a revenue jump of 22%, showing accelerated growth. With expectations of improved earnings and a non-GAAP gross margin increase to 54%, analysts are predicting a 53% boost in AMD’s earnings next year, making it an attractive semiconductor stock to consider buying now.

Investors may want to take advantage of AMD’s potential growth in the AI chip market and beyond, as the company is expected to benefit from the proliferation of AI across various industries. With a strong product portfolio and positive guidance, AMD could see solid gains in the future, making it a compelling investment opportunity.



Read more at Nasdaq: Where Will AMD Stock Be in 2025?