Wednesday,AMD Shares of AT&T closed up more than 91% after the company beat earnings estimates on both the top and bottom lines.A day after giving an optimistic forecast for its AI chip business in 2024, the stock price achieved this leap.
AMD posted earnings of 70 cents per share, slightly ahead of estimates from LSEG, formerly Refinitiv, of 68 cents per share on an adjusted basis. Revenue also beat slightly, totaling $5.8 billion versus expectations of $5.7 billion.
AMD CEO Lisa Su seemed to stir Wall Street's excitement with a comment late Tuesday: She said,The company expects GPU revenue to be around $400 million in the fourth quarter and to reach more than $2 billion by 2024..
The forecast reversed the stock's trajectory and helped it rise on Wednesday.
Wall Street analysts like AMD's prospects in the AI market, which is currently dominated by Nvidia.AMD remains one of the few companies that can make high-performance graphics processing units to power AI models..
“The upcoming MI300 accelerator is expected to generate $400 million in sales in Q4 and over $2 billion in sales by 2024, with healthy adoption among hyperscale data centers, enterprises, OEMs, and AI startups,” Bank of America analysts said in a note to investors.AMD says its new MI300A and MI300X GPUs are expected to start mass production in the fourth quarter of this year.
Analysts at Raymond James cut their price target to $125 from $145, but still rated AMD a "strong buy," primarily due to its performance in the AI business.
"We are lowering our estimates, but we still like the story due to the long-term AI/ML potential," said analysts at Raymond James. "AMD has gotten off to a good start,We see no reason why the company cannot gain market share of the $100 billion+ AI accelerator market in the long term.
Analysts at Jefferies expressed the same view on AMD's GPU business.
“It is likely that the earnings call will be followed by a decline in the number of active participants,” Jefferies analysts wrote in an investor note.mostThe news is that AMD now expects its datacenter GPU family (MI300) to achieve $2 billion in revenue in 2024 (we believe the market estimate is $1 billion to $1.5 billion), starting with $400 million in Q4 2023 (for high performance computing) and reaching $400 million in 2024.First$400 million per quarter (inference + training).”