Investment Rating - The investment rating for Advanced Micro Devices (AMD) is Equal-weight [8][18][41] Core Insights - AMD has launched the new Zen 5 server architecture, which is expected to enhance its leadership position in the server market, particularly with the MI350 product [2][10] - The MI300 has performed well in its first year, contributing to a projected 4.5billioninAIprocessorrevenue,buttheoverallmarketforAIisanticipatedtoexceed100 billion [6][12] - AMD's server opportunity is viewed positively, with expectations for share gains in 2025, although the pace of these gains will depend on the broader server refresh cycle [10][12] Summary by Sections Product Developments - AMD introduced the MI325X and previewed the MI350X, with the latter expected to support higher memory content and improved performance metrics [10][12] - The MI350X is projected to offer a significant uplift in inference performance, with AMD targeting a total addressable market (TAM) growth to 500billionby2028[12][13]MarketPosition−AMDisseenasastrongcompetitorintheservermarket,withthepotentialforsharegainsagainstIntel,particularlyastheservermarketrecoversfrompreviouslows[10][12]−Thecompanyhasestablishedpartnershipswithmajorcloudproviders,whichisexpectedtobolsteritsmarketpresence[10][12]FinancialProjections−ThepricetargetforAMDissetat178, reflecting a P/E ratio of approximately 41x based on FY2025 estimates [15][20] - Revenue projections indicate growth from 22.68billionin2023to40.83 billion by 2026, with non-GAAP EPS expected to rise from 2.66to6.59 over the same period [21][22]
