Advanced Micro Devices' (AMD) better-than-expected Q1 results and strong Q2 revenue outlook mitigated concerns regarding restriction on artificial intelligence from China and competition with Nvidia's (NVDA) graphics processing unit, BofA Securities said in a Wednesday note.
The company reported Q1 non-GAAP earnings late Tuesday of $0.96 per diluted share, against an estimate of $0.94 by analysts polled by FactSet. Revenue was at $7.44 billion, compared with consensus estimate of $7.12 billion.
The brokerage said the company has the potential to achieve over 20% topline growth in 2025 and 2026 despite the headwinds from China AI restriction. It also noted that the company continued to gain share in PC/server CPU against Intel (INTC), which remains in perennial restricting mode.
AMD would be able to meet or even exceed its 2025 AI GPU sales target, set at around $6.2 billion, with H2 acceleration on new MI350 product launch, BofA said.
Considering these factors, among others, BofA Securities upgraded the company to buy from neutral and raised the price objective on the stock to $120 from $105.
Price: 98.22, Change: -0.40, Percent Change: -0.40
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