Is AMD stock a buy? (May, 2024)

Following the company’s first quarter results, Roth MKM analyst Suji Desilva has maintained his “Buy” rating on Advanced Micro Devices (Advanced Micro Devices Stock Quote, Chart, News, Analysts, Financials NASDAQ:AMD).

On April 30, AMD reported its Q1, 2024 results. The company reported non-GAAP Net Income of $1.01-billion on revenue of $5.47-billion, a topline that was up 2% over the same period a year prior.

“We delivered strong first quarter results with our Data Center and Client segments each growing more than 80% year-over-year driven by the ramp of MI300 AI accelerator shipments and the adoption of our Ryzen and EPYC processors,” CEO Dr. Lisa Su said. “This is an incredibly exciting time for the industry as widespread deployment of AI is driving demand for significantly more compute across a broad range of markets. We are executing very well as we ramp our data center business and enable AI capabilities across our product portfolio.”

“AMD reported 1Q24 revenue essentially in line with consensus and guided in line with consensus as well, reflecting AI GPU momentum upside and ongoing muted non-AI segment demand. We are encouraged that the company raised its CY24 AI GPU revenue expectation and is also seeing a tailwind with client AI PC, offsetting persistent inventory impact in other segments,” Desilva wrote.

In a research update to clients April 30, the analyst maintained his “Buy” rating on AMD, but lowered his price target from $190.00 to $180.00.

Desilva thinks AMD will post EPS of $3.18 on revenue of $24.62-billion in fiscal 2024. He expects those numbers will improve to EPS of $4.30 on a topline of $29.4-billion in fiscal 2025.

“Our AMD price target of $180 represents a CY25 EV/Sales of 10x, a slight premium versus the comparable technology peers CY25 average EV/Sales of 8x reflecting AMD’s relative growth opportunity,” the analyst added.