AMD(US:AMD) Guotai Junan Securities·2024-11-03 02:17Investment Rating - The report maintains an "Overweight" rating for Advanced Micro Devices (AMD) [2][11]. Core Insights - The company's Q3 revenue and profit met expectations, with an upward revision of the 2024 data center GPU revenue guidance, driven by strong AI demand [2][11]. - The report highlights the ongoing product iterations in GPU and CPU, enhancing competitiveness, while gaming and embedded segments are expected to gradually recover [2][11]. Summary by Sections 1. Performance Overview - Q3 FY24 revenue reached $6.8 billion, a year-on-year increase of 18%, primarily due to sales growth in EPYC and Instinct GPU products [2][11]. - Non-GAAP net profit was approximately $1.5 billion, aligning with expectations [2][11]. 2. Segment Analysis - Data center revenue was $3.5 billion, up 122% year-on-year and 22% quarter-on-quarter, driven by strong growth in Instinct GPU and EPYC CPU [2][11]. - Client segment revenue was $1.9 billion, a 29% increase year-on-year, attributed to robust demand for AMD Ryzen processors [2][11]. - Gaming segment revenue was $462 million, down 69% year-on-year, mainly due to inventory reductions by Microsoft and Sony [2][11]. - Embedded segment revenue was $927 million, down 25% year-on-year, impacted by customer inventory reductions, with expectations for gradual recovery [2][11]. 3. Expenses and Spending - R&D spending growth slowed year-on-year, with a stable GPU chip iteration cycle [10][11]. - R&D expenses increased by 25% year-on-year, reflecting ongoing investment in product development [10][11]. 4. Earnings Forecast and Investment Recommendations - The report slightly adjusts the revenue forecast for FY2024E-FY2026E to $25.7 billion, $32.5 billion, and $38.9 billion respectively, with corresponding adjustments to NON-GAAP net profit [2][11]. - The target price for FY2025 is set at $162, based on a P/E ratio of 30x [2][11].