AMD Gears Up to Report Q4 Earnings: Buy, Sell or Hold the Stock?

Core Viewpoint - Advanced Micro Devices (AMD) is expected to report strong revenue growth in its fourth-quarter 2024 results, driven by significant increases in its Data Center and Client segments, despite anticipated declines in the Embedded and Gaming segments [2][4][9]. Group 1: Financial Performance Expectations - AMD anticipates fourth-quarter 2024 revenues of $7.5 billion, with a year-over-year growth of 22$7.52 billion, indicating a year-over-year growth of 21.84% [3]. - The consensus estimate for fourth-quarter earnings is $1.07 per share, reflecting a year-over-year growth of 38.96$4.1 billion, representing a year-over-year increase of 79.71% [4]. - The Client segment is expected to see revenues of $1.97 billion, indicating a year-over-year growth of 35.04$922 million, showing a decline of 12.77% year-over-year, while Gaming revenues are expected to be $509 million, reflecting a significant decline of 62.79% [9]. Group 3: Market Position and Competitive Landscape - AMD's shares have decreased by 31.2% over the past 12 months, underperforming the Zacks Computer and Technology sector, which appreciated by 25.2% [10]. - The company's current price/sales ratio is 5.81X, higher than the industry average of 3.18X, indicating a stretched valuation [13]. - AMD's stock is trading below its 50-day and 200-day moving averages, suggesting a bearish trend [16]. Group 4: Strategic Partnerships and Acquisitions - AMD has established strong partnerships with major companies like Microsoft, Oracle, and Dell, enhancing its market presence [18]. - The acquisition of ZT Systems is expected to accelerate the deployment of data center accelerators critical for AI innovation [20]. - AMD's collaboration with IBM to offer AMD Instinct MI300X accelerators on IBM Cloud aims to advance HPC and AI capabilities [19].