AMD(US:AMD) Haitong Securities International·2025-08-06 09:34Investment Rating - The report provides a positive outlook for AMD, indicating an outperform rating based on expected revenue growth and strong performance in key segments [19]. Core Insights - AMD reported FY2Q25 revenue of $7.69 billion, exceeding market expectations of $7.43 billion, with a Non-GAAP EPS of $0.48, aligning with consensus [6][1]. - The growth was primarily driven by strong sales of EPYC and Ryzen processors, which offset the negative impact of export controls on Instinct sales [6][1]. - The company anticipates significant revenue contributions from the MI400 series and Helios platform starting in 2026, representing a multi-billion dollar opportunity [8][3]. Revenue Breakdown - For 2Q25, revenue by segment was as follows: - Data Center revenue: $3.2 billion, up 14% YoY, with an operating loss of $155 million due to inventory costs [6][1]. - Client and Gaming revenue: $3.6 billion, up 69% YoY, with an operating profit of $767 million and an operating profit margin (OPM) of 21% [6][1]. - Embedded revenue: $824 million, down 4% YoY, with an operating profit of $257 million and an OPM of 33% [6][1]. Future Outlook - For 3Q25, AMD expects revenue between $8.4 billion and $9.0 billion, with a midpoint of $8.7 billion, representing a 28% YoY increase, primarily driven by high double-digit growth in the Data Center segment [10][4]. - The Non-GAAP gross margin is projected to be 54%, with operating expenses estimated at $2.55 billion [10][4]. AI Business Growth - AMD's AI business continues to show strong growth, particularly with the MI350 series accelerators, which have demonstrated competitive performance in training and inference workloads [7][2]. - The MI355 model has entered mass production ahead of schedule and is expected to significantly contribute to Data Center growth in the second half of the year [7][2]. Product Development - The MI400 series is on track for development, with expected AI performance reaching 40 PFLOPs and leading in memory and bandwidth metrics [8][3]. - The Helios platform, designed for complex AI tasks, is anticipated to enhance performance significantly for advanced models [8][3]. Shipment Delays - The MI308 product is currently under review by the U.S. Department of Commerce, causing delays in shipments, with limited output expected in 3Q25 [9][3].