Why Advanced Micro Devices is a Strong Buy

Keep an eye on Advanced Micro Devices (AMD).

While it did beat earnings estimates, guidance for the fourth quarter was soft.

For the quarter ended September, the company posted adjusted EPS of 70 cents, which beat estimates for 68 cents. Revenue of $5.8 billion was also above estimates of $5.7 billion. Moving forward, AMD expects to see about $6.1 billion in sales, which is below expectations for $6.37 billion. However, as noted by CNBC, “AMD is one of the few chipmakers capable of making the kind of high-end graphics processing units (GPUs) needed to train and deploy generative artificial intelligence models.”

AMD also provided a solid forecast for its artificial intelligence chip business, noting, “We now expect data center GPU revenue to be approximately $400 million in the fourth quarter and exceed $2 billion in 2024 as revenue ramps throughout the year.”

In after-hours trading, AMD traded down 54 cents to $97.96.