AMD: Mixed Results Are Good Enough


Following weak numbers from both Intel (INTC) and Nvidia (NVDA), mixed numbers from Advanced Micro Devices (AMD) aren't a huge surprise. The chip company had better than expected Q4 numbers and rather weak Q1 guidance.

  • Q4 sales were lighter-than-expected at $1.42 billion. Analysts polled by Bloomberg were expecting revenue of $1.44 billion during the quarter. 
  • EPS of 8 cents per share which was in-line with consensus estimates.
The key here is that AMD guided to 2019 revenue growth in the high single digit level. The secular trend remains intact and this will rule the stock for the year. My expectation remains that the company will ultimately blow away these numbers making the stock a buy on any dips into the teens.

Analysts are inexplicably down at only 6% revenue growth for the year.  The easy hurdle will help the stock return to the 2018 highs.

More research: AMD: Ramification Of Intel Miss

Update 1/30
The stock is up 10% on a positive view on the share gain opportunity in datacenter. Don't pay attention to these analysts that just don't understand the story in datacenter provides substantial upside to the high single digit growth target.

- JPMorgan raises its AMD target from $18 to $20 on Q4 results that showed the company is “executing well on its product roadmap and making progress toward its 2020 financial model.”

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