Summary
- Advanced Micro Devices, Inc. is expanding production of their MI300X series GPUs, with the MI325 & MI350 in line to be released in 2025 and the MI400 in 2026.
- General compute CPUs are set for a strong recovery, as signaled by IT infrastructure companies. This will accelerate growth in tandem with AI infrastructure adoption.
- AMD’s leadership in inferencing can bleed into training with their release of the MI350 series GPU, as it is expected to outperform the Blackwell 200 series GPU.
Advanced Micro Devices, Inc. (NASDAQ:AMD) will be reporting earnings post-market on July 30, 2024, in a highly anticipated Q2 earnings report. I anticipate management to voice continued strength in GPU sales paired with growing strength, in general, compute CPUs as the traditional server industry appears to be going through its next refresh cycle. The analyst community appears to be heavily divided on AMD’s performance, as the company has received 14 positive EPS revisions and 20 negative in the last 90 days. Despite this division, I anticipate their data center and client segments to drive the firm’s growth in eq2’24 with stronger growth going into the end of eFY24 through eFY26. Given the broader strength of the market that AMD serves, I reiterate my BUY recommendation for AMD shares, with a price target of $222/share at 11.50x eFY26 price/earnings.
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