NVIDIA, Broadcom stock rises after AMD results

Shares of Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) opened higher on Wednesday following AMD (NASDAQ:AMD) earnings report after the close on Tuesday.

AMD reported Q2 EPS of $0.69, $0.01 better than the analyst estimate of $0.68. Revenue for the quarter came in at $5.84 billion versus the consensus estimate of $5.72 billion.

Looking ahead, the company sees Q3 2024 revenue of $6.7 billion plus or minus $300 million versus the consensus of $6.61 billion. At the mid-point of the revenue range, this represents year-over-year growth of approximately 16% and sequential growth of roughly 15%.

AMD’s positive financial results have had a ripple effect across the semiconductor sector, lifting the stocks of its competitors.

Nvidia is up more than 8% shortly after the open, while Broadcom has gained almost 6%.

AMD reported strong quarterly earnings that surpassed analysts’ expectations, driven by robust demand.

Nvidia, known for its leadership in graphics processing units (GPUs) and artificial intelligence (AI) technology, saw its shares rise in response to AMD’s success. Similarly, Broadcom, a key player in the semiconductor and infrastructure software sectors, experienced a boost as the optimistic sentiment spread throughout the industry.

Reacting to the AMD report, analysts at Morgan Stanley said the company’s Q3 revenue guidance reflects strong momentum across compute businesses.

It was “a good quarter, all things considered,” wrote the bank. “We didn’t expect an upward revision, so better guidance was a surprise.”

“Given management’s enthusiasm for AI in conversations during 2q, we had previewed that the number could come up slightly, and it did – that helped numbers as well,” said Morgan Stanley. “We have highlighted concern that AI expectations were higher, the sharp selloff in AI related names mitigate that somewhat, as previewed. Our numbers come up only slightly – delaying the recovery in the 70% gross margin Xilinx business weighs on gross profit and EPS – but the stock should see relief.”

AMD shares are up 9% at the open.