Analysts reset AMD stock price target after earnings

Core Viewpoint - Advanced Micro Devices (AMD) reported Q4 earnings that exceeded consensus estimates, but disappointing guidance led to a 16% drop in shares, prompting a reassessment of stock outlook by analysts [1] Financial Performance - AMD achieved revenue of $10.3 billion, reflecting a 34% year-over-year increase and an 11% sequential rise [5] - Gross margin improved to 54%, up 3 percentage points year-over-year and 2 percentage points sequentially [5] - Net income reached $1.5 billion, a significant increase of 213% year-over-year and 22% sequentially [5] - Diluted earnings per share (EPS) were $0.92, up 217% year-over-year and 23% sequentially [5] - The company provided a revenue outlook for Q1 2026, estimating approximately $9.8 billion, with a year-over-year growth of about 32% and a sequential decline of approximately 5% [5] Market Position and Future Outlook - CEO Lisa Su expressed optimism about future demand for AI chips, aiming to capture market share from Nvidia, with the launch of the MI400 series and Helios seen as pivotal [2] - AMD is positioned to grow data center segment revenue by over 60% annually over the next three to five years, with expectations to scale its AI business to tens of billions in annual revenue by 2027 [3] - Bank of America raised its price target for AMD stock following the earnings report, reflecting a positive outlook from analysts [4] Analyst Sentiment - Analysts noted that AMD stock remains under-owned and underweighted in U.S. large-cap portfolios, with only two out of ten investors holding the stock [6] - Pro forma EPS estimates for 2026 and 2027 were raised by 3% and 9%, respectively, to $6.49 and $10.30 [6] - The server CPU business is expected to continue growing at a strong double-digit rate, projected at 35% year-over-year for calendar year 2026 [7]