Analysts Adjust AMD Stock Price Target Before Earnings

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As the market braces for volatility, several significant events are on the horizon. The Federal Reserve’s two-day meeting commences on Tuesday, April 30, with an anticipated decision to maintain the key federal funds rate between 5.25% to 5.5%. Meanwhile, Friday will see the release of the April jobs report, expected to maintain unemployment at 3.8% with around 240,000 payroll growth. Moreover, a total of 175 S&P 500 companies are scheduled to unveil earnings this week, including industry giants like Apple (NASDAQ:AAPL), Amazon (NASDAQ:AMZN), Eli Lilly (NYSE:LLY), and Advanced Micro Devices (NASDAQ:AMD).

AMD (NASDAQ:AMD), set to report first-quarter earnings on Tuesday, is drawing attention as a “battleground” stock amid an ongoing competition for market share with AI chip-making leader Nvidia (NASDAQ:NVDA). Analysts surveyed by FactSet anticipate AMD to report earnings of 62 cents per share on $5.48 billion in revenue. In the previous quarter, AMD matched expectations with fourth-quarter earnings of 77 cents per share and revenue totaling $6.17 billion, reflecting a surge from the year-ago period.

Despite an aggressive push in AI technology, analysts note “mixed conditions” in AMD’s landscape. The company’s MI300X graphics-processing unit, aimed at supporting generative AI technologies, is forecasted to yield around $3.5 billion in sales over the upcoming year, positioning AMD against Nvidia’s market dominance. CEO Lisa Su highlighted significant growth in the data center and client segments, with data center revenues surging by 38% to $2.3 billion and the client segment experiencing a 62% revenue increase to $1.5 billion.

As analysts reassess their stock price targets for AMD, Morgan Stanley lowered its target to $177 from $193 while maintaining an overweight rating on the shares. Describing AMD as one of the major “battleground” stocks, Morgan Stanley cites mixed conditions in the core business and lingering uncertainties in AI, particularly surrounding Nvidia’s upcoming Blackwell chip. Despite this, Bank of America maintains a buy rating on AMD with a price target of $195 per share, foreseeing continued strength in the server segment to offset challenges in the PC market.

In the longer term, analysts remain cautiously optimistic, foreseeing a broad-based recovery. However, given the current market dynamics, the upcoming earnings report may not serve as a significant catalyst for AMD’s stock performance.

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