AMD Stock Hits 52-Week High Despite Earnings Miss. Here's Why

TLDR

Table of Contents

AMD stock hit a 52-week high of $182.61 despite missing earnings expectations by one cent per share
Seven of the top 10 AI model builders now use AMD’s current Instinct MI350 chips
The company has maintained quarterly revenue growth above 20% for multiple consecutive quarters
AMD received U.S. government approval to export certain AI processors to China
Multiple analysts raised price targets with some reaching $230 following strong Q2 performance

AMD stock reached new heights this week, touching a 52-week high of $182.61 even after the company missed earnings expectations in its latest quarterly report. The semiconductor maker posted adjusted earnings that fell short by just one cent per share, yet investors seem focused on bigger developments.

The real story lies in AMD’s growing presence in the artificial intelligence chip market. CEO Lisa Su revealed that seven of the top 10 model builders and AI companies now use AMD’s current Instinct chips. This represents a major shift in the competitive landscape previously dominated by Nvidia.

Growing AI Market Share

The adoption rate of AMD’s Instinct MI350 chips suggests the company is making real progress against its much larger rival. OpenAI CEO Sam Altman has already committed to using AMD’s upcoming MI400 chips when they launch next year. The broader adoption across leading AI companies indicates AMD may be offering competitive alternatives to Nvidia’s offerings.

This development comes as AMD works to narrow the gap with Nvidia in the AI accelerator market. The company was slower to enter the AI chip race but appears to be gaining momentum with major tech players.

AMD’s financial performance has shown consistent strength beyond the minor earnings miss. The company has delivered quarterly revenue growth above 20% for several quarters running. Revenue growth hit 27.17% in the most recent period.

The stock has surged over 40% this year alone. Over the past 12 months, AMD shares have climbed 30.21%. The company’s market capitalization now stands at $296.3 billion.

Analyst Upgrades Follow Strong Results

Several major investment firms raised their price targets for AMD following the earnings report. TD Cowen increased its target to $195 from $165, maintaining a Buy rating. The firm cited strong performance in the Gaming segment as a key driver.

Piper Sandler also lifted its target to $190 from $140 while keeping an Overweight rating. The firm noted that AMD’s revenue guidance for the September quarter exceeded market expectations.

Some analyst targets reach as high as $230. A total of 23 analysts have revised their earnings expectations upward recently. The consensus reflects growing confidence in AMD’s trajectory.

The company received additional positive news with U.S. government approval to export certain AI processors to China. This regulatory clearance opens up additional market opportunities for AMD’s chip business.

Strong Gaming and Server Performance

AMD’s Gaming segment showed particular strength in the latest quarter. The division helped offset some pressure from other business units. Server segment performance also contributed to the overall revenue beat.

Revenue exceeded expectations even though per-share earnings came in slightly below forecasts. The top-line growth demonstrates continued demand for AMD’s products across multiple segments.

The company’s forward earnings multiple of 44 times expected earnings reflects the growth trajectory analysts anticipate. While the trailing multiple exceeds 100 times earnings, the forward-looking metric shows more reasonable valuations based on projected growth.

InvestingPro analysis currently shows the stock trading above its calculated Fair Value. The platform assigns AMD a “GOOD” financial health score. Twenty additional insights are available through the InvestingPro service.

KeyBanc maintained its Sector Weight rating while acknowledging the robust second-quarter performance and promising third-quarter guidance.

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