AMD: AI And Data Centers Lead The Charge (Rating Upgrade)

(15min)

Summary

  • I cautiously upgraded Advanced Micro Devices, Inc. to “Buy” due to its strong Q2 results, including a 9% YoY revenue increase and an 18% rise in non-GAAP EPS.
  • AMD's data center segment saw a 115% YoY revenue surge, driven by Instinct MI300 GPUs and EPYC CPUs, positioning it well for future growth.
  • Despite challenges in gaming and embedded segments, AMD's focus on AI and data center expansion, including the Silo AI acquisition, supports long-term growth.
  • My updated DCF valuation model indicates AMD is undervalued by nearly 15%, making it an attractive investment opportunity at this time.
  • Looking for a helping hand in the market? Members of Beyond the Wall Investing get exclusive ideas and guidance to navigate any climate. Learn More »

AMD headquarters in Santa Clara, California, USA

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Intro & Thesis

After first writing about Advanced Micro Devices, Inc. (NASDAQ:AMD) stock with a “Sell” rating in August 2023, I admitted my mistake later that year (December 2023) and upgraded AMD to “Neutral.” In

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This article was written by

Danil Sereda profile picture
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Daniel Sereda is chief investment analyst at a family office whose investments span continents and diverse asset classes. This requires him to navigate through a plethora of information on a daily basis. His expertise is in filtering this wealth of data to extract the most critical ideas. He runs the investing group Beyond the Wall Investing in which he provides access to the same information that institutional market participants prioritize in their analysis. Learn more.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in AMD over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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