Leading semiconductor company Advanced Micro Devices, Inc. (NASDAQ: AMD) saw its shares rise 3.1% on July 29. The upside could have been triggered by the CHIPS+ bill that now sits on President Joe Biden's desk, awaiting his signature, after bagging the green light from Congress on July 28.
The bill is expected to solve the ongoing supply-chain challenges and chip shortages being faced by the U.S. semiconductor industry.
Meanwhile, the semiconductor company is scheduled to report its results for the second quarter of 2022 on August 2, after the market closes.
The company is expected to witness continued strong performance from its Ryzen and EPYC server processors in the to-be-reported quarter. Moreover, AMD’s solid full-year guidance indicates higher organic growth across AMD and growing synergies from the recently acquired Xilinx business.
Now, let’s take a look at analysts' expectations and the factors that might have influenced the company's second-quarter results.
Consensus Estimates for Q2 Are ImpressiveAnalysts expect AMD to post earnings of $1.03 per share in the second quarter of 2022. The estimate compares favorably with the figure of 63 cents per share reported in the second quarter of 2021.
Also, the consensus estimate for the company’s revenues stands at $6.53 billion, higher than the year-ago tally of $3.85 billion.
Key Catalysts for Q2 EarningsThe company is witnessing strong demand for its chips used in computers and graphics cards. The momentum in AMD’s business that delivers semiconductors for games consoles, embedded processors, and other system-on-chips is expected to have boosted the results for the to-be-reported quarter.
Revenues from the EPYC server processor are expected to keep rising. Notably, its revenues more than doubled for the third consecutive quarter in the first quarter of 2022.
Street Is Optimistic about AMD StockOverall, the Street is optimistic about the stock and has a Moderate Buy consensus rating based on 18 Buys and eight Holds. Advanced Micro Devices’ average price target of $127.43 signals that the stock may surge nearly 34.9% from current levels. Shares of the company have lost 37.1% so far this year.
AMD scores a "Perfect 10" on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform the market. Also, financial bloggers are 88% Bullish on AMD, compared to the sector average of 65%.
TipRanks data shows that hedge funds are Very Positive about the company, as they bought 9.3 million shares of AMD in the last quarter.
Prospects Look Bright for AMDAdvanced Micro Devices is well-positioned to gain from upbeat prospects in the U.S. semiconductor industry. The company is expected to deliver impressive results on the back of strength across all its business segments. Overall, AMD stock, which has upside potential of 34.9%, looks promising and could be considered by investors interested in the semiconductor space.
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