2 Companies Unlocking Higher Profits: AMD, TSLA

Group 1: Earnings Overview - The earnings season is nearing its end, with a majority of S&P 500 companies having reported their quarterly results, maintaining a positive growth trend expected to continue [1] - Several prominent companies, including Advanced Micro Devices (AMD) and Tesla (TSLA), have experienced profitability boosts with improved margins year-over-year [2] Group 2: Advanced Micro Devices (AMD) - AMD reported a 1.1% earnings per share (EPS) beat relative to the Zacks Consensus estimate and sales that were 1.5% ahead of expectations, reflecting growth rates of 31% and 17% respectively [3] - The company achieved a gross margin of 54%, significantly higher than the 47% from the previous year, indicating consistent margin expansion [3] - AMD is projected to deliver record annual revenue for 2024, driven by substantial growth in its Data Center and Client segments, with Data Center revenue reaching $3.5 billion, a 122% increase year-over-year [5] Group 3: Tesla - Tesla's gross margin expanded to 19.8%, up from 17.9% in the same period last year, marking a recovery in margins [7] - Although margins are still below the highs of 2022, the recent improvement is encouraging, supported by the lowest-ever cost of goods sold (COGS) per vehicle reported during the period [9] - The positive commentary on profitability led to an upgrade of Tesla's stock to Zacks Rank 1 (Strong Buy), with analysts revising EPS expectations upward [10] Group 4: Margin Expansion Insights - Margin expansion is viewed as a bullish signal, indicating higher profits for companies, typically achieved through effective cost-cutting measures or favorable economic conditions, as seen with AMD and Tesla [12]