Advanced Micro Devices, Inc. (NASDAQ:AMD) shares are trading almost 6% lower in pre-market Wednesday following the Q1 earnings announcement. While both Q1 EPS and revenues came in better than expected, Q2 revenue guidance at the midpoint missed the consensus estimates.
EPS was $0.60, compared to the consensus estimate of $0.56. Revenue fell 9% year-over-year to $5.4 billion, beating the consensus estimate of $5.3B, as Embedded segment strength was offset by lower Client segment revenue.
“Our strategically important Data Center and Embedded segments contributed more than 50 percent of revenue in the first quarter. For the second quarter we expect sequential growth in our Data Center and Client segments offset by modest declines in our Gaming and Embedded segments,” said CFO Jean Hu.
The company expects Q2/23 revenue in the range of $5-5.6B, compared to the consensus estimate of $5.49B.
Citi analysts reiterated a Neutral rating and raised the price target on AMD stock to $85 per share. They believe the company's H2 outlook for data center (double-digit quarter-over-quarter growth) is "aggressive."
"We believe there is more downside to Consensus and our C24 EPS estimate is 8% below Consensus," analysts said in a note.
BMO analysts highlighted continued market share gains against Intel (NASDAQ:INTC).
"Our view is to look ahead to the earnings power that the company can drive on share gains over the LT. Nearer term, we are lowering our estimates, and continue to rate shares Outperform," analysts wrote.
Additional reporting by Senad Karaahmetovic