To The Moon

$Advanced Micro Devices(AMD)$ has announced it will report its Q1 2025 financial results on Tuesday, May 6, 2025, after the market closes. A conference call for management to discuss the results is scheduled for 5:00 p.m. Eastern Time (which is 5:00 AM on Wednesday, May 7th, Singapore Time).

Revenue: Consensus estimates center around $7.12 billion. This would represent significant year-over-year growth of approximately 30%. This aligns with the midpoint of the guidance AMD provided earlier ($7.1 billion +/- $300 million).

Earnings Per Share (Adjusted EPS): Consensus forecasts put adjusted EPS around $0.75. This would be a substantial increase from the $0.43 reported in Q1 of the previous year. Some sources mention slightly higher estimates or predict an earnings beat based on recent analyst activity (positive Earnings ESP).

Gross Margin: Expected non-GAAP gross margin is anticipated to be around 54%, similar to the guidance provided after Q4.

Advanced Micro Devices (AMD) Last Positive Earnings Call Saw Share Price Decline By 19.62%

AMD had a positive earnings call on 04 Feb 2025 which saw its share price declined by 19.62% since.

The earnings call reflects a strong performance in AMD's data center and client segments, with significant growth driven by AI and server products. However, challenges remain in the gaming and embedded segments, which experienced notable declines. Overall, the positive growth in key areas outweighs the lowlights, positioning AMD well for continued success in 2025.

Advanced Micro Devices (AMD) Guidance

During the AMD fourth quarter and full year 2024 conference call, the company provided substantial guidance on its financial performance and projections. AMD reported record annual revenue of $25.8 billion, representing a 14% increase year-over-year, with significant contributions from its data center segment, which grew 94% to total $3.9 billion in the fourth quarter alone. The client segment also saw substantial growth, with revenue increasing 52% year-over-year to $2.3 billion. The company achieved a gross margin of 54% for the quarter, up 330 basis points from the previous year, and delivered a net income growth of 26% annually. Looking forward to 2025, AMD expects double-digit revenue and EPS growth, with first-quarter revenue projected at $7.1 billion, reflecting a 30% increase year-over-year, although a 7% sequential decrease due to seasonality.

The data center segment is anticipated to grow strongly, driven by new product introductions like the MI350 series GPUs and a continued focus on AI, with potential for the data center AI business to expand from over $5 billion in 2024 to tens of billions in the coming years.

Key Factors and Segments to Watch

AMD reported record annual revenue of $25.8 billion, up 14%, driven by significant growth in the data center and client segments.

Gross margin expanded by 300 basis points to 54%, and earnings per share grew 25% year-over-year, demonstrating strong operating leverage.

Data Center: This segment is expected to be the main growth driver, fueled by strong demand for EPYC server processors and, critically, the ramp-up of the Instinct MI300 series AI accelerators. Performance here, especially regarding AI chip sales and traction against competitor Nvidia, will be heavily scrutinized.

Data center revenue increased 69% year-over-year to a record $3.9 billion, with strong adoption of EPYC CPUs and MI300X deployments expanding with major cloud partners.

AMD's data center AI business delivered greater than $5 billion in revenue for the year, with major wins in AI deployments and progress in AI software and hardware roadmaps.

Client Segment: Continued strength is expected, benefiting from the ongoing recovery in the PC market and demand for AMD's Ryzen processors for desktops and laptops.

Client segment revenue increased 58% year-over-year to a record $2.3 billion, driven by strong demand for Ryzen processors and record OEM PC sell-through.

Gaming Segment: This segment is anticipated to show a significant year-over-year decline, primarily due to reduced demand for semi-custom chips used in game consoles as the current console cycle matures.

Gaming segment revenue declined 59% year-over-year to $563 million due to decreased semi-custom sales and accelerated sellout in preparation for new GPU launches.

Embedded Segment: Performance here has been weaker due to inventory adjustments in prior quarters. Analysts will watch for signs of stabilization or recovery in demand.

Embedded segment revenue decreased 13% year-over-year to $923 million, with mixed demand across markets and a slower-than-expected overall market recovery.

Advanced Micro Devices (AMD) Price Target

Based on 40 analysts from Tiger Brokers offering 12 month price targets for Advanced Micro Devices in the last 3 months. The average price target is $136.10 with a high forecast of $200.00 and a low forecast of $70.00. The average price target represents a 41.68% change from the last price of $96.06.

The outlook AMD provides for Q2 2025 and any updates to its full-year forecast will be extremely important. Commentary on the expected trajectory of AI chip sales throughout the rest of 2025 will be a key focus.

Technical Analysis - Exponential Moving Average (EMA)

AMD will be reporting its result next Tuesday (06 May) but the bulls still not able to claim the daily uptrend, it cannot break above the $97.21 which is into the resistance range between 98 and 112.

This would be a big level that the bulls would need to get through now and we are not seeing any new uptrend, so it would be the same to break through 97, but we will need to see if it can be done by this week, if not any pullback happen, we could see a level near above 83, then we could be looking for higher low.

We need that higher low for possible further trend situation. That might be a good level to do a swing trade long. But AMD is in my long-term portfolio. The important to note is the data center thesis, we need more confirmation and clarity on this data center thesis because AMD is now trading at a very very cheap valuation.

Considering that AMD is at a 20 for price to earnings and a 69 peg, but if it dropped slightly then short puts might be a strategy you want to do. Considering RSI is building up momentum, we will need to wait for a signal.

AMD short interest is decreasing, so when short interest for a stock decreases, it often signals that investors are becoming less bearish (less pessimistic) about the stock's future performance. T

But in AMD case, this could indicate that short sellers are closing out their positions, leading to increased demand and potentially pushing the stock price higher. 

Summary

AMD is expected to report strong year-over-year growth in revenue and earnings for Q1, primarily driven by its Data Center (especially AI chips) and Client segments, offsetting expected weakness in Gaming.

I would think that market would be watching the the performance of the MI300 AI accelerators, and particularly the forward guidance for Q2 and the rest of 2025. These will be crucial for determining the market's reaction when AMD reports on May 6th.

Appreciate if you could share your thoughts in the comment section whether you think AMD would be able to provide a positive guidance for the sales performance of the MI300 AI accelerators.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.