Alexander Sikov
Investment Thesis
As Advanced Micro Devices, Inc. (AMD) prepares to report its Q2 FY2025 results on August 5, investor sentiment is sharply divided between optimism and concern. Since my last coverage, AMD is
Inside AMD's Most Pivotal Quarter
Summary
- Advanced Micro Devices, Inc.’s Q2 revenue is forecast at $7.43 billion, up 27.3% year-over-year, driven by MI300 GPU and EPYC server demand.
- EPS is expected to decline 30% YoY to $0.48 due to China export curbs and early-stage MI300 ramp costs.
- Gross margins could drop to 51–52% from 54% in Q1, pressured by high HBM costs and ROCm ecosystem investments.
- Data Center revenue may exceed $3.2 billion in Q2, while client revenue is projected between $1.4 and $1.6 billion.
- AMD EPS is expected to rebound to $1.16 in Q3 and $1.34 in Q4, signaling Q2 as a transitional trough.
Hi, I'm Yiannis. Spotting winners before they break out is what I do best.Experience: Previously worked at Deloitte and KPMG in external/internal auditing and consulting. Education: Chartered Certified Accountant, Fellow Member of ACCA Global, with BSc and MSc degrees from U.K. business schools. Investment Style: Spotting high-potential winners before they break out, focusing on asymmetric opportunities (with at least upside potential of 2-3X outweighing the downside risk). By leveraging market inefficiencies and contrarian insights, we seek to maximize long-term compounding while protecting against capital impairment.Risk management is paramount—we seek a strong margin of safety to protect against capital impairment while maximizing long-term compounding. Our 4-5 year investment horizon allows us to ride out volatility, ensuring that patience, discipline, and intelligent capital allocation drive outsized returns over time.Investment Methodology: Identifying High-Conviction Opportunities1️⃣ Leadership & Management Analysis • Proven track record in scaling businesses. • Smart capital allocation and insider ownership. • Consistent revenue growth and credible guidance. 2️⃣ Market Disruption & Competitive Positioning • Strong technology moat and first-mover advantage. • Network effects that drive exponential growth. • Market penetration in high-growth industries. 3️⃣ Financial Health & Risk Management • Sustainable revenue growth with efficient cash flow. • Strong balance sheet and long-term survival runway. • Avoiding excessive dilution and financial weakness. 4️⃣ Valuation & Asymmetric Risk/Reward • Revenue multiples vs. peers and DCF modeling. • Institutional backing and market sentiment analysis. • Ensuring downside protection with massive upside. 5️⃣ Portfolio Construction & Risk Control • Core Positions (50-70%) – High-confidence, stable plays. • Growth Bets (20-40%) – High-risk, high-reward opportunities. • Speculative (5-10%) – Moonshot disruptors with massive potential.
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