AMD: I’m Expecting Short-Term Volatility (NASDAQ:AMD)

Date:


Egg timer smashing open

Flashpop/DigitalVision via Getty Images

I first covered Advanced Micro Devices, Inc. (NASDAQ:AMD) in January 2024; I put out a Hold rating at the time, and since then, the stock has gained ~10% in price. In this analysis, I explain why I am reiterating my Hold

Strategic Area Summary
AI and Machine Learning Integration of AI across product lines with Ryzen AI 300 Series and Instinct MI325X accelerator. Future architectures (CDNA 4, CDNA Next) aim for a 35X speed increase.
Data Center Expansion Introduction of 5th Gen EPYC “Turin” processors with Zen 5 cores, enhancing efficiency and performance.
Partnerships and Ecosystem AMD has collaborated with Microsoft (MSFT), HP Inc. (HPQ), Lenovo Group Limited (OTCPK:LNVGF), and ASUSTeK Computer Inc. (OTCPK:ASUUY) to enhance AI and personalized computing experiences.
Gaming and Graphics New RDNA 3 architecture-based Navi 3X products and Ryzen processors enhance gaming performance. The company is also exploring metaverse applications and cloud gaming.
Adaptive and Embedded Computing AMD’s acquisition of Xilinx allows it to advance adaptive computing and AI engines with Versal AI Edge and other products. This area targets automotive and industrial markets.

Company Competition
Nvidia

Nvidia has leadership in AI GPUs, including its A100 series GPUs, which are widely used in data centers for machine learning and AI. Its CUDA platform and ecosystem also provide an extensive moat. This informs its AI software stack with a range of libraries supporting AI development and deployment.

Nvidia will also be challenging AMD significantly in data center GPUs, particularly through its A100 Tensor Core GPU, which is highly regarded for performance in AI and HPC applications. Nvidia also continues to lead in both AI inference and training workloads, with major cloud platforms like AWS, Alphabet Inc. (GOOGL) (GOOG) Cloud, and Azure being major adopters.

Intel

Intel’s AI strategy includes a range of AI accelerators, including the Habana Labs Gaudi processors for training and inference and the Movidius VPUs for edge AI applications. Intel aims for its AI portfolio to cover a broad range of use cases, from data centers to edge.

Intel also offers integrated AI solutions, for example, utilizing AI in its Xeon processors, which is used with the OneAPI unified programming model to help enterprises integrate AI seamlessly into their existing infrastructures.

AWS

AWS has developed its own custom AI chips, including Inferentia for inference workloads and Trainium for training workloads. These chips offer superior performance and cost-efficiency for AI applications on AWS. The company’s SageMaker platform also offers a suite of AI services, making it easier for developers to build, train, and deploy machine learning models.

Significantly, AWS is the leading cloud service provider, with a vast global infrastructure to support a wide range of AI and HPC workloads. In my opinion, it is likely to retain the leading position for the foreseeable future.

AMD NVDA INTC AMZN
FWD Revenue Growth 5Y Avg 26.22% 28.45% -1.18% 18.48%
FWD Diluted EPS Growth 5Y Avg 47.79% 34.47% -8.6% 24.81%
FWD Free Cash Flow Growth 5Y Avg 75.89% 40.92% -8.5% 28.63%
TTM Net Income Margin 5Y Avg 11.08% 29.23% 19.94% 4.16%
Equity-to-Asset Ratio 0.83 0.64 0.55 0.41
FWD P/E GAAP Ratio ~115 ~70.5 = TTM, FWD = Not meaningful ~32 = TTM, FWD = Not meaningful ~40.5
FWD P/S Ratio ~10.5 ~37.5 = TTM, FWD = Not meaningful ~2.5 ~3



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

spot_imgspot_img

Popular

More like this
Related

Formula 1 and Amazon debut AI ‘Statbot’ to personalize broadcasts

At the Spanish Grand Prix on Sunday, Formula...

Passage: Donald Sutherland and Willie Mays

Passage: Donald Sutherland and Willie Mays - CBS...