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Once Wall Street really recognizes AMD watch out! Nvidia market cap is AMD's next target to surpass. Keep watching innovation take shape from AMD to take main stage! AMD is advancing in every area where chips are required!
https://www.tomshardware.com/news/tsmc-fab-21-arizona
It’s important to understand AMD’s real fundamentals and current position to avoid mis-interpreting AMD’s real potential and true value!
Below is a brief summary from AMD’s Q2 ER & transcript (including Q&A):
- Data center: +83% yoy, +15% qoq (to $1.5B)
- Revenue: +70% (Q2 6.6B), led by data center & embedded
- EPS: +67% yoy (Q2 $1.05)
- GM (gross margin): 54% (vs 48% yoy)
- Gaming: +32% yoy (Revenue $1.7B)
- Embedded: Revenue $1.3B
- Stock buyback: Bought $920 mil in Q2 ($7.4B remaining)
Guidance:
- Q3 Revenue: $6.7 billion (+55% yoy)
- 2022 Revenue: 26.3B (+60% yoy)
- non-Gaap GM: 54%
AMD’s key comments:
- Data center & Embedded grew well & will continue to grow strongly!
- Delivered record core markets revenue in all areas including AI, which AMD has started executing new hardware & software to capture AI across cloud, edge and endpoints.
- GPU: RDNA 3 will deliver more than 50% better performance
* PC: It’s the only declining one! More softness expected (thought would go down high single digit, but now expects to drop mid-teens)! This was incorporated in the guidance!
- Despite the current macroeconomic environment, we see continued growth. AMD has “never been stronger and the markets for our products have never been as large or diverse” (especially with the acquisitions of XLNX & Pensando).
Notes:
(1) Question from analyst about Data center: Your Data center revenue is about 1/3 of your nearest competitor (Intel), compared to about 1.7% a year ago, any comment for the future?
Lisa Su: .. All in all, we’ll continue to see significant growth as we go into the 2nd half of 2022 & into 2023.]
(2) We were supply constrained in Q2. Certainly on embedded side & tight on the server side, we will have additional supply as we get toward the end of the year. That will help us really meet more of the demand from customers. So we feel pretty good about all of those puts and takes.
My personal view:
(1) AMD seemed to be the only 1 still showed great results and future growth in this bearish market!
(2) Market volatility may continue, but with time AMD should be a big winner for patient investors!
GLTA!
Keep up your vision Dr. Lisa Su...the best eyesight in the chip industry. We believe in you and want you to
be the winner of all time!!! I've been invested in you since 2015...timing is everything.
Growth! Where will AMD get the growth needed to hit $250? Innovation is the engine. But how is this growth sourced? Here is what Dr Lisa Su sees for AMD’s future as a Blue Chip Stock.
1. TAM Growth
2. TAM Scope Expansion
3. Market Share
First the existing TAM of AMD is expanding. We are increasingly a digitized world. AMD is in the right space at the right time. And a rising tide will rise all boats. The demand for High Performance Computing (HPC) to edge processing Internet of Things (IoT) is increasing. AMD will grow with the growth of the existing TAM.
Second there is the simple fact of Market Share gain. Intel is an unfortunate source of AMD market share growth. It looks like Intel will be at AMD’s mercy for the next few years. Similarly AMD will take market share away from Nvidia as AMD continues to innovate in GPU and software. Compared to AMD, Nvidia is now a 1 trick pony with lower EPS!!
Last but not least is TAM Scope Expansion. This growth is fueled from three main sources Acquisition/Merger, Organic/R&D and Partnerships/Joint Ventures. We are witnessing AMD hit on all three sources for TAM scope expansion. It is the heart of innovation, developing new products, new processes and servicing new customers.
These 3 are all great, but which growth source is most important? Just like First Corinthians 13:13 where it says, “And now these three remain: faith, hope and love. But the greatest of these is love. For AMD the greatest of these three is “TAM Scope Expansion”! This is where AMD will continue to surprise us.
Spoiler Alert! This is the beginning of the AMD System Design House!! This will be the biggest surprise in TAM Scope Expansion. This is the next phase you will now see unfold.
After 2 acquisitions for TAM Scope Expansion AMD will now enter into consolidation as AMD digests the enabling new products and new capabilities. Software has taken a huge boost at AMD. Research and Development annual investment now exceeds $5B annually. And Partnerships will be increasingly announced like the ECARX collaboration. https://ir.amd.com/news-events/press-releases/detail/1085/amd-and-ecarx-to-collaborate-on-immersive-digital-cockpit
Expect great things with the AMD System Design House. AMD will no longer be just a chip pure play. Products are coming based upon AMD’s most excellent System on a Chip (SOC) design for fabrication capabilities. In this sense AMD will become more like a company like Apple with products at continuingly higher levels of integration.
This is the path to $250 and it’s happening right now with AMD, Xilinx, Pensando and partnerships with other market leader experts formed to bring specific System products into AMD’s TAM Scope Expansion.
But in the end the strong position of AMD - especially compared to other semis - convinced most of the buyers.