Stocks

Headlines

AMD Gears Up for Q1 2025 Report Amid Tariff Concerns

AMD is set to announce its first-quarter results on May 6, with investors keenly watching for updates on their AI chip sales and potential impacts from recent tariffs. The upcoming report could determine stock price movements in the short term.

Date: 
AI Rating:   6
Upcoming Earnings Report
Advanced Micro Devices (AMD) is scheduled to report its financial results for the first quarter of 2025 on May 6. Investors eagerly await updates on AI chip sales, particularly with the recent launch of their MI350 series GPUs. The release could significantly impact AMD's stock price depending on guidance provided by CEO Lisa Su.

Revenue Growth
The report notes that AMD generated $25.8 billion in total revenue in 2024, representing a 14% increase from the prior year. A highlight is the company’s staggering 94% increase in data center revenue, reaching $12.6 billion. This extraordinary performance indicates a strong momentum in AMD's AI-related sales. Investors should watch for any revisions to this outlook in the upcoming report, as continued growth in this segment could positively impact stock prices.

Earnings Per Share (EPS) and Valuation Concerns
The stock currently trades at a P/E ratio of 28.2, which is below Nvidia’s P/E of 37.1. Analysts predict an earnings-per-share forecast of $4.65 for 2025, leading to a forward P/E ratio of 20.1. Should AMD’s earnings align with these forecasts, it could suggest that the stock is undervalued and present a buying opportunity. However, potential revisions to sales forecasts due to tariffs could place downward pressure on valuations.

Tariff Impact
Recent tariffs imposed by President Trump could adversely affect AMD's customers and thus its revenue streams. Although semiconductors are exempt from the new tariffs, the overarching economic climate and reduced infrastructure budgets could still pose risks. Addressing these concerns will be critical during the upcoming earnings call.

Conclusion
Overall, AMD's upcoming report will be a critical event for stock prices in the short term. If the company can manage to maintain strong growth in AI chip sales and provide positive revisions about its forecasts, the stock is likely to react favorably. Investors need to assess the impact of tariffs carefully, as that might inject volatility into the stock in the near term.
Stocks:  AMD