Advanced Micro Devices reported better-than-expected 4Q results. Adjusted earnings per share soared 63% during the quarter to $0.52 year-on-year. The bottom-line results of the semiconductor company also surpassed analysts’ expectations of $0.47.
AMD's (AMD) 4Q sales jumped 53% to $3.24 billion and beat the Street's estimates of $3.02 billion. Revenues at its computing and graphics division grew 18% year-over-year mainly driven by strong sales of Ryzen processors.
The enterprise, embedded and semi-custom segment recorded revenue growth of 176% primarily benefiting from strong sales of semi-custom and EPYC (extreme performance yield computing) processors. (See AMD stock analysis on TipRanks).
AMD's 1Q and 2021 revenue outlook came in higher than analysts’ expectations. For 1Q, the company projects sales of about $3.2 billion, while analysts had been looking for sales of $2.73 billion. For 2021, it anticipates revenue growth of nearly 37% versus the consensus estimate of a 27.7% increase.
Following the earnings release, Mizuho Securities analyst Vijay Rakesh raised the price target to $105 (10.9% upside potential) from $102 and reiterated a Buy rating. In a note to investors, Rakesh wrote, “DecQ saw positive demand trends across all end-markets, with the MarQ guide noting strength in Cloud, PC and gaming consoles offsetting some seasonal weakness.”
The rest of the Street is cautiously optimistic on the stock. The Moderate Buy analyst consensus is based on 15 Buys, 6 Holds, and 2 Sells. The average analyst price target of $98.30 implies upside potential of about 3.8% to current levels. Shares have gained about 88.1% over the past year.
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Starbucks Corp. reported mixed first-quarter results (period ending Dec. 27, 2021). In the reported quarter, profit beat Street estimates, while sales fell short of expectations. Looking ahead, the coffee chain’s 2Q earnings outlook missed analysts' expectations, which dragged the stock down by 1.7% in Tuesday’s extended trading session.
Starbucks’ (SBUX) 1Q earnings of $0.61 per share topped Street estimates of $0.55 per share but declined 22.8% year-over-year due to lower sales and margins. Revenue fell 5% to $6.75 billion and missed analysts' forecasts of $6.93 billion.
The coffee chain reported that the year-over-year decline in sales was a result of lower traffic and reduced operations amid the pandemic-led store closures.
The company’s global comparable-store sales (comps) decreased by 5% year-over-year due to a 19% decline in comparable transactions. However, the average ticket increased 17% during the quarter. Comps declined 5% in the US but increased 5% in China.
As for 2Q, Starbucks expects to report earnings in the range of $0.45 to $0.50 per share, which is well below analysts' estimates of $0.59 per share.
For fiscal 2021, Starbucks forecasts earnings in the range of $2.70-$2.90 per share, compared to consensus estimates of $2.81 per share. The company anticipates 2021 revenue in the range of $28-29 billion, compared to analysts’ expectations of $28.5 billion. Starbucks sees global comps growth of 18% to 23% in 2021. (See SBUX stock analysis on TipRanks)
Ahead of the earnings results, Goldman Sachs analyst Jared Garber on Jan. 19 initiated coverage on the stock with a Buy rating and a price target of $115 (9.9% upside potential). In a note to investors, Garber said that large chains should benefit from the “rapid digital transformation and independent restaurant challenges.”
The analyst believes that Starbucks should also benefit from the economic re-opening in 2021.
Overall, consensus among analysts is a Moderate Buy based on 9 Buys and 9 Holds. The average analyst price target of $110.06 implies upside potential of about 5.1% to current levels. Shares have gained 16.1% in one year.
Furthermore, TipRanks data shows that financial bloggers have a bullish call on the stock.
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Microsoft Corp. reported stronger-than-expected 2Q results (ending Dec. 31, 2020), driven by demand for its cloud computing services during the coronavirus pandemic. Shares of the software company increased 3.7% in Tuesday’s extended trading session.
Microsoft’s (MSFT) 2Q earnings of $2.03 per share increased 34.4% year-over-year and crushed the analysts’ expectations of $1.64 per share. The tech giant's 2Q revenue grew 16.8% to $43.1 billion year-over-year and topped the consensus estimates of $40.2 billion.
Microsoft’s CFO Amy Hood said, “Accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34% year over year.”
The tech giant's cloud platform Azure saw 50% growth during the quarter, as more enterprises shift to cloud computing. Meanwhile, Xbox revenue was up 40% from the year-ago period.
Revenues generated from the company's productivity and business processes segment increased 13% year-over-year. Furthermore, intelligent cloud and personal computing segments' sales grew 23% and 14%, respectively, on a year-over-year basis. (See MSFT stock analysis on TipRanks)
Following the results, Wedbush analyst Daniel Ives maintained a Buy rating and a price target of $270 (16.2% upside potential) on the stock. Ives said, “With a vaccine being deployed globally, the WFH [work from home] shift will clearly moderate as many return to the office during the course of 2021."
"However, from an IT [information technology] architecture perspective, the cloud shift will continue to gain speed as many CIOs [chief information officers] aggressively go down the digital transformation path with MSFT's Azure/Office 365 footprint as the main enterprise cloud artery,” the analyst added.
Overall, the rest of the Street has a firmly bullish outlook with the analyst consensus of a Strong Buy based on 23 unanimous Buys. The average analyst price target of $253.30 implies upside potential of about 9% to current levels. Shares have gained by about 42.3% in one year.
What's more, MSFT scores a perfect 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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