Advanced Micro Devices (NASDAQ:AMD) stock showed strength in crucial areas in a recent quarterly report. Yet, the crowd balked, but if you to think for yourself. At the end of the day, you’ll find AMD is an artificial intelligence chipmaker with solid revenue and earnings.
The AMD share price is down significantly from its early March price of around $211. Alarmingly, the stock fell nearly 9% in a single day, but don’t panic.
Momentum stocks can be volatile. AMD’s future is secure, so there’s no need to worry.
AMD: First, the Bad News
AMD stock declined sharply after the company released its first-quarter 2024 financial results. So, let’s consider a couple of reasons why this occurred.
First of all, some investors may have been disappointed with AMD’s current-quarter sales guidance. The company predicted quarterly revenue of $5.4 billion to $6 billion, the midpoint of which is $5.7 billion.
Meanwhile, Wall Street’s estimate called for $5.72 billion in current-quarter revenue for AMD.
That’s not a wide miss, but short-term stock traders can be very demanding sometimes. Also, AMD guided for its MI300 AI accelerators to generate around $4 billion in revenue for 2024.
That might sound ambitious, but analysts estimated as much as $8 billion in full-year MI300 revenue.
There’s Good News for AMD, Too
Those pieces of bad news evidently shook some nervous AMD stockholders out of the trade. That’s their problem, not yours, as AMD provided ample evidence of the company’s robust growth.
Let’s look at AMD’s results for this year’s first quarter. The company’s revenue increased 2% year over year to $5.5 billion; this result beat Wall Street’s forecast of $5.48 billion in revenue.
AMD earned 62 cents per share, which was in line with the analysts’ consensus estimate.
AMD demonstrated excellence in a couple of key areas. Amazingly, the company’s Q1-2024 Data Center segment revenue grew 80% YOY to $2.3 billion. Its Client segment revenue increased 85% YOY to $1.4 billion.
AMD CEO Lisa Su remains confident in her company’s future as a premier AI chip provider.
“This is an incredibly exciting time for the industry as widespread deployment of AI is driving demand for significantly more compute across a broad range of markets,” Su said.
AMD Stock: Don’t Rely on the Crowd’s Reactions
Sometimes, the crowd’s first reaction is the wrong one. If some short-term stock traders reacted negatively to AMD’s quarterly news release, this doesn’t mean you have to follow their lead.
Really, you should think for yourself and stay calm when AMD stock wobbles and wavers sometimes. After all, AMD is still a solid AI-hardware business that’s growing rapidly in key areas.
Therefore, it’s fine to maintain a share position in AMD if you have a confident long-term outlook for the company.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
