Technology

AMD (AMD) might face a potential stock correction around earnings results on Tuesday because of a tougher near-term setup, but long-term artificial intelligence tailwinds remain strong, BofA Securities said Monday in a note. The investment firm said despite a “multi-hundred” billion dollar AI market, AMD faces tough competition from Nvidia, which has over 75% market share, and customer chip partners. AMD is expected to gain share in server CPU market from Intel in Q4, and the trend will continue in 2024, BofA said. The firm expects AMD’s combined revenue from PC and server CPU to make up 20% of the total in 2024. BofA reiterated its buy rating for AMD and raised price objective to $195 from $165.

AMD’s (AMD) fiscal fourth-quarter results are expected to match Wall Street estimates, though its first-quarter sales could miss views as it faces a tough near-term setup, BofA Securities said Monday. The chipmaker is scheduled to report fourth-quarter results Tuesday, with BofA projecting adjusted earnings at $0.77 per share on sales of about $6.13 billion, largely in line with the Street’s views. BofA sees 2023 adjusted EPS at $2.65 on sales of $22.64 billion. The brokerage said that AMD’s server central processing unit likely gained share from rival Intel (INTC) during the quarter, with gains expected to continue in 2024, BofA analysts, including Vivek Arya, said in a note. The firm said there’s potential for first-quarter outlook miss versus Street estimates on weakness in AMD’s PC and field-programmable gate array segments. BofA cut its first-quarter sales expectations to $5.53 billion from $5.73 billion, below the Street’s view for $5.8 billion, according