Advanced Micro Devices, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Advanced Micro Devices, Inc. (NASDAQ:AMD) just released its second-quarter report and things are looking bullish. The company beat forecasts, with revenue of US$12b, some 2.0% above estimates, and statutory earnings per share (EPS) coming in at US$1.38, 32% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the most recent consensus for Advanced Micro Devices from 47 analysts is for revenues of US$50.8b in 2026. If met, it would imply a huge 23% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to surge 43% to US$5.66. Before this earnings report, the analysts had been forecasting revenues of US$49.7b and earnings per share (EPS) of US$5.38 in 2026. It looks like there's been a modest increase in sentiment following the latest results, withthe analysts becoming a bit more optimistic in their predictions for both revenues and earnings.

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 5.5% to US$608per 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$1,250 per share, while the most bearish prices it at US$365. With such a wide range in price targets, analysts are almost certainly betting on widely divergent outcomes in the underlying business. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Advanced Micro Devices' growth to accelerate, with the forecast 51% annualised growth to the end of 2026 ranking favourably alongside historical growth of 17% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 25% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Advanced Micro Devices is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Advanced Micro Devices following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Advanced Micro Devices analysts - going out to 2028, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for Advanced Micro Devices you should know about.

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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.