Advanced Micro Devices (NASDAQ:AMD) shares are rallying since it exceeded the Wall Street consensus estimates for revenue and earnings by a wide margin. The “better than expected” outlook for the second quarter and higher price targets from analysts have also been adding to trader’s sentiments.

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AMD share price rose 57% in the last two months alone, thanks to substantial revenue growth from its computing and graphics segments.

Analysts See Upside for Advanced Micro Devices Stock

The majority of analysts have raised their price targets for Advanced Micro Devices stock following its first-quarter results. Bank of America Merrill Lynch has increased the price target to $17, citing PC gaming market accelerating 27% annually compared to the earlier forecast of 15%.

Stifel analyst Kevin Cassidy, set AMD stock price target at $17 from $14; saying “end demand forecasts for PCs, servers and graphics add-in-cards are increasing.”

Financial Numbers and Outlook Support the Uptrend

Its Computing and Graphics segment revenue jumped 95% year over year to $1.12 billion in the first quarter this year. Revenue from this segment also improved 23% on a quarter over quarter basis – which is an indication of robust demand for Radeon and Ryzen products. Also, selling prices of Radeon and Ryzen also increased substantially from the previous quarter.

Source: Q1 Presentation

Dr. Lisa Su, AMD president, and CEO said: “PC, gaming and datacenter adoption of our new, high-performance products continues to accelerate.  We are excited about our long-term roadmaps and focused on delivering sustained revenue growth and profitability.”

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The company expects second-quarter revenue in the range of $1.725 billion compared to the earlier forecast of $1.67 billion. The second quarter revenue forecast shows a 50% increase from the year-ago period. The company has more than $1 billion in cash & cash equivalents at the end of the quarter, which they believe is enough to cover capital requirements.

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