AMD(US:AMD) First Shanghai Securities·2024-11-05 07:32Investment Rating - The report assigns a "Buy" rating for the company with a target price of $180.00, indicating a potential upside of 24.94% from the current stock price of $144.07 [4][5]. Core Insights - The company has raised its revenue guidance for the MI300 series to $5 billion, with expectations to catch up to NVIDIA's Blackwell by the end of 2025 [2]. - The data center revenue has shown significant growth, increasing by 122.1% year-over-year to $3.55 billion, driven by the widespread adoption of the fifth-generation EPYC processors [2]. - The client segment is expected to see a moderate recovery in PC shipments, with a projected year-over-year growth of 38.7% in client revenue, reaching $6.45 billion [3]. Summary by Sections Financial Performance - In Q3 2024, the company reported revenues of $6.82 billion, a year-over-year increase of 17.6%, slightly above Bloomberg consensus estimates [1]. - The gross margin improved to 50.1%, up by 2.8 percentage points year-over-year, with operating profit soaring by 223% to $720 million [1]. - Non-GAAP net profit reached $1.5 billion, reflecting a year-over-year growth of 32.5% [1]. Revenue Guidance - The company has provided a revenue guidance midpoint of $7.5 billion for Q3, representing a year-over-year increase of 21.6% [1]. - The Non-GAAP gross margin guidance is set at 54% for the upcoming quarter [1]. Product Development and Market Position - The MI300 series is expected to generate $5 billion in revenue for the year, with the upcoming MI325X and MI350 series products anticipated to significantly enhance performance [2]. - The client business is projected to grow with the introduction of over 100 Ryzen AI platforms by 2025, despite a slight decline in global PC shipments in 2024 [3]. Market Outlook - The report forecasts a compound annual growth rate (CAGR) of 38.3% for the company's revenue from 2024 to 2026, with Non-GAAP net profit CAGR expected at 63.2% [4]. - The long-term AI GPU market share is projected to reach 5%-10% as capital expenditures from major cloud service providers continue to rise [2].