Advanced Micro Devices, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

A week ago, Advanced Micro Devices, Inc. (NASDAQ:AMD) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. Advanced Micro Devices beat earnings, with revenues hitting US$10b, ahead of expectations, and statutory earnings per share outperforming analyst reckonings by a solid 13%. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

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Taking into account the latest results, the current consensus from Advanced Micro Devices' 44 analysts is for revenues of US$49.2b in 2026. This would reflect a sizeable 31% increase on its revenue over the past 12 months. Per-share earnings are expected to bounce 75% to US$5.28. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$46.9b and earnings per share (EPS) of US$4.57 in 2026. So it seems there's been a definite increase in optimism about Advanced Micro Devices' future following the latest results, with a substantial gain in the earnings per share forecasts in particular.

Check out our latest analysis for Advanced Micro Devices

With these upgrades, we're not surprised to see that the analysts have lifted their price target 45% to US$437per share. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Advanced Micro Devices at US$625 per share, while the most bearish prices it at US$225. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's clear from the latest estimates that Advanced Micro Devices' rate of growth is expected to accelerate meaningfully, with the forecast 44% annualised revenue growth to the end of 2026 noticeably faster than its historical growth of 17% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 21% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Advanced Micro Devices to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Advanced Micro Devices' earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Advanced Micro Devices going out to 2028, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Advanced Micro Devices you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.