You Won't Believe What Advanced Micro Devices CEO Lisa Su Just Said
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Sep 17 2024
0mins
Should l Buy AMD?
Source: Fool
Recent Updates on AMD: The video discusses the latest developments regarding Advanced Micro Devices (AMD) and its stock performance as of September 13, 2024.
Call to Action: Viewers are encouraged to watch the video for more insights, subscribe to the channel, and take advantage of a special offer linked in the description.
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Analyst Views on AMD
Wall Street analysts forecast AMD stock price to rise
33 Analyst Rating
25 Buy
8 Hold
0 Sell
Strong Buy
Current: 203.770
Low
210.00
Averages
289.13
High
377.00
Current: 203.770
Low
210.00
Averages
289.13
High
377.00
About AMD
Advanced Micro Devices, Inc. is a global semiconductor company. The Company is focused on high-performance computing and artificial intelligence (AI). Its segments include Data Center, Client and Gaming, and Embedded. Data Center segment includes AI accelerators, microprocessors (CPUs) for servers, graphics processing units (GPUs), accelerated processing units (APUs), data processing units (DPUs), Field Programmable Gate Arrays (FPGAs), and Adaptive system-on-Chip (SoC) products for data centers. Client and Gaming segment includes CPUs, APUs, chipsets for desktops and notebooks, discrete GPUs, and semi-custom SoC products and development services. Embedded segment includes embedded CPUs, APUs, FPGAs, system on modules (SOMs), and Adaptive SoC products. It markets and sells its products under the AMD trademark. Its products include AMD EPYC, AMD Ryzen, AMD Ryzen PRO, Virtex UltraScale+, among others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Software Sector Sell-off: As market focus shifts, the software sector has experienced significant sell-offs, with investors questioning the profitability of unprofitable AI companies, leading to a decline in both good and bad companies' stock prices, reflecting a reassessment of pricing power.
- Resilience of Semiconductor Industry: Despite the software sector's downturn, the semiconductor industry remains robust, as evidenced by the divergence of the Russell 1000 Semiconductor Index from the software sector, indicating sustained demand for physical AI infrastructure, with data center cooling companies reporting record backlogs.
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- NVIDIA Position Cut: Ark reduced its NVIDIA holdings by 154,441 shares, totaling around $26.6 million, aligning with concerns over potential overvaluation in AI-centric firms, which could lead to significant market corrections.
- AMD and TSMC Sales: Ark sold 38,245 shares of AMD and 15,696 shares of TSMC, valued at approximately $7.8 million and $5.1 million respectively, reflecting challenges in the semiconductor industry, including rising prices and production capacity constraints.
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- Revenue Growth Forecast: Arm Holdings anticipates that its newly launched Arm AGI CPU will drive annual revenue to $15 billion by fiscal 2031, representing over fivefold growth from its current $1.2 billion, indicating strong demand and potential profitability in the AI market.
- Market Share Expansion: The Arm AGI CPU is specifically optimized for AI operations in data centers, featuring 64 CPUs and 8,700 cores, and has already attracted interest from tech giants like Meta and Cloudflare, showcasing its competitive edge in high-performance computing.
- Stock Price Potential: With Arm's current stock price around $157, if it achieves an EPS of $9 in fiscal 2031, applying a conservative P/E ratio of 73 could see the stock soar to $657, reflecting a 318% increase and indicating investor optimism about its future growth.
- R&D Investment Returns: Arm's significant investment in R&D is paying off, with a 26% year-over-year revenue increase in Q3 and a gross margin exceeding 97%, laying a solid foundation for its future chip manufacturing business and enhancing its market competitiveness.
See More
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- Strong IPO Performance: Arm Holdings went public on September 14, 2023, and its stock has surged over 200% since then, significantly outpacing the S&P 500's 45% gain during the same period, indicating strong market confidence in its growth potential.
- Robust Revenue Growth: In the third quarter of fiscal 2026, Arm generated $1.2 billion in revenue, a 26% year-over-year increase, with a gross margin exceeding 97%, showcasing solid financial performance despite high R&D expenditures that limited adjusted EPS growth to 10%.
- AI Chip Launch: Arm announced the debut of its AGI CPU, designed specifically for data centers and featuring 64 CPUs with 8,700 cores, which is expected to drive annual revenue growth to $15 billion over the next five years, highlighting its competitive strength in the AI sector.
- Optimistic Future Outlook: Management forecasts total revenue of $25 billion by fiscal 2031, with an EPS target of $9, suggesting a potential stock price increase of 318% to $657, reflecting the market's optimistic expectations for its long-term growth trajectory.
See More
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Investment Opportunities: Analysts are highlighting potential opportunities in various sectors, including energy stocks and companies like Advanced Micro Devices (AMD), which is expected to see growth due to strong institutional buying and planned product launches.
Stock Performance: Companies like Rivian Automotive and Tesla are under scrutiny, with Rivian showing quiet performance while Tesla faces regulatory challenges, impacting investor sentiment and stock prices.
Consumer Sector Insights: Retail stocks, particularly Gap and Macy's, are experiencing mixed reactions post-earnings reports, with some showing recovery while others face caution from investors regarding their future strategies.
See More
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- Market Capitalization: Taiwan Semiconductor's market cap stands at $1.7 trillion, showcasing its resilience and strong competitive position in the semiconductor industry despite the overall decline in tech stocks.
- Revenue Growth: In Q4, TSMC reported a 26% year-over-year revenue increase to $33.7 billion, with an operating margin of 54%, highlighting its advantage in high-performance computing, particularly in AI demand.
- Market Resilience: Despite macroeconomic pressures, TSMC's stock has risen 7.5% year-to-date, outperforming the S&P 500, which is down 7%, indicating its robust market performance.
- Investment Value: With a price-to-earnings ratio of 31.5, TSMC is viewed as a reliable investment in the tech sector, expected to maintain strong growth despite geopolitical risks.
See More
