Advanced Micro Devices (AMD 2.46%) reported earnings after the closing bell on Tuesday, and shares were up over 6% after hours on the news. The company reported 71% sales growth in the first quarter with a beat on both the top and bottom lines. AMD's earnings per share were $1.13 adjusted versus $0.91 expected, which is a staggering increase of 117% year over year. Revenue came in at $5.89 billion versus $5.52 billion, which popped 71% year over year.
With supply chain issues and inflationary macroeconomic conditions, many analysts expected AMD to lower guidance. Perhaps the most impressive earnings announcement is that AMD expects $6.5 billion in sales in the current quarter, which outpaces analyst expectations of $6.38 billion. Raising guidance in the current economic environment certainly raised a few eyebrows, so let's dig deeper.
AMD also announced that it repurchased $1.9 billion of its own stock in the quarter, which leaves $8.3 billion in remaining stock repurchase authorizations. AMD is involved in many secular growth trends, including gaming, the metaverse, crypto, data centers, the cloud, and more, but can the company continue to impress at its current valuation? As of Tuesday's closing, the stock was down nearly 40% this year, but it was climbing after hours. Is AMD stock a buy now?
In the video below, I break down AMD earnings highlights. I also chart out AMD's valuation and provide an opinion on where I think the stock is headed from here.
*Stock prices used in the below video were during the trading day of May 3, 2022. The video was published on May 3, 2022.
