William Stein, a top analyst from Truist, expects second-quarter earnings to be the “next significant catalyst” for Advanced Micro Devices (AMD) stock. However, given the ongoing uncertainties, Stein said that he currently doesn’t have a strong view on whether the Q2 earnings will be a positive or negative catalyst. Stein reiterated a Hold rating on AMD stock with a price target of $111. AMD stock has risen 16% over the past month, driven by optimism about the company’s new AI (artificial intelligence) chips and growing data center GPU (graphics processing unit) revenue.
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AMD is scheduled to announce its Q2 earnings on August 5. Wall Street expects the chipmaker to report EPS (earnings per share) of $0.49, reflecting a year-over-year decline of 29%. Revenue is estimated to grow by 27% to $7.41 billion.
At the recently held Advancing AI event, AMD highlighted its new AI GPUs (like MI350 and MI400), which addressed investors’ concerns about the chipmaker significantly lagging behind Nvidia (NVDA) in the AI race.
Top Truist Analyst Weighs in on AMD’s Data Center GPU Business
Stein highlighted the ongoing debate about the strength of AMD’s data center GPU business. He thinks that the discussion is not about whether the company can deliver data center GPU products and grow revenue, but on whether customers are buying AMD’s GPUs to “stimulate competition and price-check NVDA” or because they actually prefer the company’s technology.
Commenting on a mid-quarter controversy on whether AMD’s next-generation data center GPUs will be used at Amazon’s (AMZN) AWS (Amazon Web Services) unit or not, Stein stated that based on his discussions with management, he believes that the appearance and disappearance of customers’ logos from AMD’s list reflect the preference of some clients to announce supplier relationships at their own events.
Stein also mentioned that significant inventory builds, as indicated by industry contacts, are difficult for him to explain. Overall, the analyst is sidelined on AMD stock amid ongoing uncertainties.
Stein ranks 5th out of more than 9,700 analysts on TipRanks. He has a success rate of 77%, with an average return per rating of 32.2% over a one-year period.
Is AMD Stock a Buy or Sell Now?
On Monday, Citi analyst Christopher Danely raised the price target for AMD stock to $145 from $120, while maintaining a Hold rating as part of a Q2 earnings preview for the semiconductor space. The 5-star analyst increased his estimates, saying that the prior assumption that tariffs would trigger a slowdown in the sector does not appear to be happening. Danely expects better times for the sector, driven by strong demand and inventory replenishment.
With 24 Buys and 10 Holds, Wall Street has a Moderate Buy consensus rating on Advanced Micro Devices stock. The average AMD stock price target of $133.62 indicates that the stock is fully valued at current levels.
