Advanced Micro Devices (NASDAQ: AMD) experienced another surge in its share price during Friday’s trading session. The semiconductor giant saw a remarkable 5.3% increase, as reported by S&P Global Market Intelligence.
Although no company-specific news surfaced for AMD, the stock price soared in conjunction with the optimistic outlook on AI demand and growth prospects. The recent release of Dell‘s fourth-quarter report post-market close on Thursday served as a bullish trigger for AI stocks.
Dell’s Fourth-Quarter Performance Sparks Optimism in AI Stocks
Dell’s fourth-quarter report and guidance injected a fresh wave of optimism into AI stock investors. The company outperformed expectations with non-GAAP earnings of $2.20 per share on sales of $22.3 billion, surpassing analysts’ average estimates of $1.72 per share on sales around $22.15 billion. Moreover, Dell indicated robust demand for its AI server products, forecasting this trend to fuel strong performance until 2025.
Closing Friday’s trading with a remarkable 31.6% surge, Dell’s success had a cascading effect on the valuations of major AI players, propelling AMD’s stock up by 37.5% year-to-date and an astonishing 158% over the past year.
Looking Ahead: The Trajectory of AMD Stock
AMD’s recent rally stems from the expanding opportunities in the AI sector. Presently, the stock trades at 55.7 times this year’s projected earnings and 37 times the following year’s anticipated profits.
AMD’s guidance for the first quarter of the year targets sales of approximately $5.4 billion, indicating a flat year-over-year performance for the period. Unlike Nvidia, AMD is yet to experience a significant uptick in sales and earnings due to AI processor sales. However, market sentiment remains bullish, anticipating an acceleration in growth in the near future.
AMD PE Ratio (Forward) data provided by YCharts.
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