Advanced Micro Devices (NASDAQ:AMD) reported strong earnings in Q3, which have paved the way for an enhanced market share in the semiconductor industry.
AMD stock to gain 44% in 12 months
The company topped analysts’ earnings and revenue estimates when it reported its results on Tuesday. The semiconductor producer has also revised its revenue guidance to 41%, up from 32%. This exceptional performance was fuelled by strong demand for AMD-powered gaming consoles and server sales.
Following the string performance, various analysts led by Vivek Arya have revised their price target for AMD stock to $110. This new target means that the stock will rise around 44% in the next 12 months from Wednesday’s close. According to the Analysts, the company’s growing expansions in the chip industry has established the company as the main share gains in the sector as its largest rivals continue to lag.
In a note to clients, the analysts said that AMD’s management execution, pipeline, and opportunity set have been enhanced by the faltering of major rival Intel Corp (NASDAQ:INTC). This sets up the company for material share gain in the $50 billion chip market.
AMD reported revenue of $2.8 billion in Q3
In Q3, the company reported revenue of $2.8 billion and net income or $390 with diluted earnings per share of $0.32. Lisa Su, the CEO of the company, said that the business accelerated in Q3 because of strong demand in gaming, PC, and data server products driving record revenue. She added that this was the fourth quarter straight that the company had posted over 25% YoY revenue growth, which signifies the substantial customer momentum the company is seeing.
The company is consolidating its position in the sector, and it announced a $35 billion acquisition of chip manufacturer Xilinx. AMD expects to close the deal by the end of 2021 to give the company an advantage in the communications tech businesses. The deal is beneficial to AMD, and it will add around $3 to its earnings per share by 2023.