AMD(US:AMD) First Shanghai Securities·2025-02-10 07:23Investment Rating - The report assigns a "Buy" rating to Advanced Micro Devices (AMD) with a target price of $140.00, indicating a potential upside of 27.09% from the current price of $110.16 [2][3]. Core Insights - AMD is expected to see significant revenue growth driven by strong demand for Ryzen processors and AI GPU sales, with projected revenues of $31.77 billion in 2025, representing a 23.2% increase from 2024 [3]. - The company anticipates AI GPU sales to reach $5 billion in 2024, with expectations of $7.5 billion in 2025, supported by a clear product roadmap for data center products [3][5]. - Client business revenue is projected to grow by 22% in 2025, benefiting from AI feature updates and a recovering global PC market [3]. - The gaming and embedded business segments are expected to face challenges in the short term, but sales are anticipated to normalize post-inventory adjustments [3]. Financial Summary - For the fiscal year ending December 31, 2023, AMD reported total revenue of $22.68 billion, with a projected increase to $25.79 billion in 2024 and $31.77 billion in 2025 [3][9]. - Non-GAAP net profit is expected to rise from $4.30 billion in 2023 to $5.44 billion in 2024 and $7.46 billion in 2025, reflecting a compound annual growth rate (CAGR) of 52.6% from 2025 to 2027 [3][9]. - The company's gross margin is projected to improve from 46.1% in 2023 to 56.2% by 2027, indicating enhanced profitability [9]. Revenue Projections - AMD's revenue from the data center segment is expected to grow significantly, reaching $16.95 billion in 2025, up from $12.58 billion in 2024 [6]. - The forecast for GPU revenue indicates a substantial increase, with contributions expected to be $7.54 billion in 2025 and $10.38 billion in 2026 [6][5]. - The overall revenue CAGR for AMD from 2025 to 2027 is projected at 27.8%, driven by growth in both data center and client segments [3].