AMD's EPYC Powers GOOGL & ORCL Solutions: Should You Hold the Stock?

Core Insights - Advanced Micro Devices (AMD) is experiencing growth due to the adoption of its EPYC processors by major companies like Alphabet and Oracle [1][6] - The company is expanding its product offerings, including the fifth-generation EPYC processors and new gaming graphics cards [2][3] - AMD is facing stiff competition from NVIDIA in the cloud data center and AI chip markets, impacting its stock performance [4][5] Product Development - AMD's fifth-generation EPYC processors support high-performance computing, networking, and storage for enterprise and cloud infrastructure [2] - The new AMD Radeon RX 9070 XT and RX 9070 graphics cards are based on the anticipated RDNA 4 architecture, enhancing the gaming portfolio [3] Financial Performance - AMD's stock has declined by 19.9% year-to-date, underperforming the broader technology sector [5] - Data Center revenues accounted for approximately 50% of AMD's annual revenues, increasing by 69% year-over-year to $3.9 billion [6] Market Position and Competition - AMD's EPYC instances grew by 27% in 2024, with significant contributions from major hyperscalers launching AI instances [6] - The company is contending with increasing competition from custom AI chips offered by competitors like Broadcom [4] Strategic Partnerships and Acquisitions - AMD has a diverse partner base, including Cisco, IBM, Oracle, and others, which is crucial for expanding its market presence [7] - Recent acquisitions, such as Silo AI and ZT Systems, are aimed at enhancing AMD's AI capabilities and bridging the gap with NVIDIA [8] Earnings Outlook - The Zacks Consensus Estimate for AMD's 2025 earnings is projected at $4.60 per share, reflecting a year-over-year growth of 38.97% [9] - AMD has consistently beaten earnings estimates in the past four quarters, with an average surprise of 2.32% [10]