AMD Stock Surges on Q4 Earnings Beat, Strong Guidance

Advanced Micro Devices (AMD) reported strong fourth-quarter earnings and guidance, driving its stock price up on Tuesday. The semiconductor giant's adjusted earnings per share (EPS) of $1.09 beat analysts' estimates of $1.04, while revenue of $7.66 billion surpassed the expected $7.54 billion. AMD's stock price rose by 5.5% in after-hours trading following the earnings release.

AMD's strong performance was driven by growth in its data center and client segments. The data center segment, which includes high-performance computing (HPC) and artificial intelligence (AI) solutions, reported record revenue of $3.9 billion, up 69% year-over-year. This growth was primarily driven by the strong ramp of AMD Instinct™ GPU shipments and growth in AMD EPYC™ CPU sales. The client segment, which focuses on desktop and mobile computing, also reported record revenue of $2.3 billion, up 58% year-over-year, primarily due to strong demand for AMD Ryzen™ processors.

AMD's AI strategy, highlighted in the article "AMD: Investors eyeing AI strategy in Q4 results," contributed to its competitive advantage and future growth prospects. The company's partnerships with IBM, Vultr, and Aleph Alpha to deliver highly performant AI infrastructure at scale, along with its investment in AI chip design, position AMD well in the growing AI market. The recent developments in the global AI market, such as the emergence of cost-efficient AI models like DeepSeek's RI, further validate AMD's focus on AI as a key driver for growth.

AMD's strong financial performance and adaptability to market changes have led analysts to maintain a bullish outlook on the company's stock. Of the 14 analysts covering AMD tracked by Visible Alpha, eight have issued a "buy" or equivalent rating, compared with five "hold" ratings, and one "sell." Their consensus price target is $164, about 40% above Tuesday's intraday price of $117.46.