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Zacks Investment Ideas feature highlights: AMD and Nvidia
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For Immediate Release
Chicago, IL – August 1, 2024 – Today, Zacks Investment Ideas feature highlights AMD (AMD - Free Report) and Nvidia (NVDA - Free Report) .
Time to Buy AMD Stock After Exceeding Expectations?
As we continue receiving quarterly results from big tech firms, AMD stands out after exceeding its Q2 top and bottom line expectations Tuesday evening.
With AMD shares spiking over +10% in this morning's trading session, investors may be wondering if it’s time to buy stock in the chip leader following its favorable Q2 Report.
AMD’s Q2 Results
AMD’s Q2 growth was driven by its Instinct, Ryzen, and EPYC processors which accelerate AI workloads. Designed to compete with Nvidia’s AI chips, the Instinct MI300X was a key driver to AMD’s expansion, seeing high demand from cloud and enterprise providers.
This led to Q2 sales rising 9% year over year to $5.83 billion which came in 2% above estimates of $5.7 billion. More impressive, Q2 EPS of $0.69 beat expectations by 3% while spiking 19% from $0.58 a share in the comparative quarter. AMD has surpassed earnings expectations in three of its last four quarterly reports posting an average EPS surprise of 2.32%
Revenue Guidance & Silo AI Acquisition
For the third quarter, AMD is expecting strong growth in its Data Center and Client segments and projects Q3 revenue to be $6.7 billion plus or minus $300 million. This came in slightly above the current Zacks Consensus of $6.58 billion or 13% growth (Current Qtr below).
Additionally, AMD announced it will be completing the acquisition of Silo AI during Q3 for $665 million. Notably, Silo AI is Europe’s largest private artificial intelligence company.
The Silo team is expected to expand AMD’s capability to service large enterprise customers looking to optimize their AI solutions. Silo will also bring deep expertise in large language model development to help accelerate optimization of inference and training solutions.
Recent Price Performance
Year to date, AMD’s stock is still down -2% which has noticeably lagged the broader indexes and Nvidia’s +132%. However, over the last two years, AMD’s +49% has topped the S&P 500 and Nasdaq although this has lagged Nvidia’s stellar gains of over +500%.
Monitoring AMD’s Valuation
AMD’s stock currently trades at 40.6X forward earnings which is a premium to the S&P 500’s 22.9X but closer to Nvidia’s 38.5X. Furthermore, AMD trades well below its five-year high of 107.2X forward earnings and at a noticeable discount to the median of 52.5X.
Bottom Line
AMD’s stock currently lands a Zacks Rank #3 (Hold). While it may be too soon to say an extended rebound is in store for AMD’s stock this year, the company’s growth trajectory remains attractive and the acquisition of Silo AI should be promising for its long-term prospects as well.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Investment Ideas feature highlights: AMD and Nvidia
For Immediate Release
Chicago, IL – August 1, 2024 – Today, Zacks Investment Ideas feature highlights AMD (AMD - Free Report) and Nvidia (NVDA - Free Report) .
Time to Buy AMD Stock After Exceeding Expectations?
As we continue receiving quarterly results from big tech firms, AMD stands out after exceeding its Q2 top and bottom line expectations Tuesday evening.
With AMD shares spiking over +10% in this morning's trading session, investors may be wondering if it’s time to buy stock in the chip leader following its favorable Q2 Report.
AMD’s Q2 Results
AMD’s Q2 growth was driven by its Instinct, Ryzen, and EPYC processors which accelerate AI workloads. Designed to compete with Nvidia’s AI chips, the Instinct MI300X was a key driver to AMD’s expansion, seeing high demand from cloud and enterprise providers.
This led to Q2 sales rising 9% year over year to $5.83 billion which came in 2% above estimates of $5.7 billion. More impressive, Q2 EPS of $0.69 beat expectations by 3% while spiking 19% from $0.58 a share in the comparative quarter. AMD has surpassed earnings expectations in three of its last four quarterly reports posting an average EPS surprise of 2.32%
Revenue Guidance & Silo AI Acquisition
For the third quarter, AMD is expecting strong growth in its Data Center and Client segments and projects Q3 revenue to be $6.7 billion plus or minus $300 million. This came in slightly above the current Zacks Consensus of $6.58 billion or 13% growth (Current Qtr below).
Additionally, AMD announced it will be completing the acquisition of Silo AI during Q3 for $665 million. Notably, Silo AI is Europe’s largest private artificial intelligence company.
The Silo team is expected to expand AMD’s capability to service large enterprise customers looking to optimize their AI solutions. Silo will also bring deep expertise in large language model development to help accelerate optimization of inference and training solutions.
Recent Price Performance
Year to date, AMD’s stock is still down -2% which has noticeably lagged the broader indexes and Nvidia’s +132%. However, over the last two years, AMD’s +49% has topped the S&P 500 and Nasdaq although this has lagged Nvidia’s stellar gains of over +500%.
Monitoring AMD’s Valuation
AMD’s stock currently trades at 40.6X forward earnings which is a premium to the S&P 500’s 22.9X but closer to Nvidia’s 38.5X. Furthermore, AMD trades well below its five-year high of 107.2X forward earnings and at a noticeable discount to the median of 52.5X.
Bottom Line
AMD’s stock currently lands a Zacks Rank #3 (Hold). While it may be too soon to say an extended rebound is in store for AMD’s stock this year, the company’s growth trajectory remains attractive and the acquisition of Silo AI should be promising for its long-term prospects as well.
Why Haven’t You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.