Want to get an idea of the inner workings of any company? just go straight to the horse’s mouth. I.e., have a talk with some senior management. Probably easier said than done, unless you’re a Wall Street analyst, that is. Talks with C-suite members are part of the job and offer investors insights into how a company sees its future panning out.
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Recently, to get an idea of what Advanced Micro Devices (NASDAQ:AMD) has on the horizon, Benchmark analyst Cody Acree held talks with some of its top brass, including CFO Jean Hu.
“Generally,” said the 5-star analyst, who ranks amongst the top 2% of Street experts, “we believe Jean was able to provide a significant amount of color to the larger topics of AMD’s belief in its long-term market share gains in Client Computing, as well as in the Data Center and Embedded processing markets, plus the company’s emerging position as a true leading alternative source of accelerator GPUs for the industry’s transition to AI.”
As for the current state of the PC market, Hu noted a “material return to supply/demand normalization.” After dealing with excess inventory due to COVID-related supply issues, things finally started getting back to normal in 2H23. Even though things are balancing out now, the company expects the usual drop in revenue for the Client division in the March quarter, followed by a quieter Q2, and then things should pick up again in the second half of the year, like they usually do.
Considering AMD’s Client Computing results for the December quarter, they were flat compared to the previous readout. However, Intel saw a noticeable uptick with 12% sequential growth and a significant 33% year-over-year uptick. When asked about this gap and whether it signaled a shift back in market share towards Intel, Hu highlighted the importance of looking at trends over multiple quarters. She pointed out that when you look at the broader picture, especially between the second half of FY22 and 2H FY23, AMD’s Client revenue increased by 51%. In contrast, Intel’s growth over the same period was a more modest 13%.
As far as AMD’s involvement in the AI PC market, the CFO promptly pointed out that AMD had taken a pioneering step by being the first to bring to market PCs equipped with an AI NPU engine. The company recently rolled out the updated Ryzen 8000G Series in January, marking the industry’s first desktop CPUs with an integrated AI engine. With millions of AI PCs already powered by Ryzen processors shipped to date, AMD estimates that it commands an impressive 90% market share in AI-enabled PCs.
There’s no doubt Acree came away impressed, with the analyst saying he continues to believe AMD offers an “attractive investment opportunity.”
As such, Acree reiterated a Buy rating and raised his price target from $187 to $245, suggesting the shares have room for growth of 38% from current levels. (To watch Acree’s track record, click here)
Elsewhere on the Street, the stock claims an additional 28 Buys plus 5 Holds, for a Moderate Buy consensus rating. The analysts see shares gaining another 11% over the coming year, considering the average target currently stands at $196.65. (See AMD stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
