AMD(US:AMD) First Shanghai Securities·2024-05-10 05:32Investment Rating - The report assigns a "Buy" rating with a target price of 178.00 HKD, indicating a potential upside of 15.26% from the current stock price of 154.43 USD [2][3]. Core Insights - The report highlights a moderate recovery in client and embedded business segments, with a strong demand for accelerated computing, particularly in the data center sector, driven by AI processor needs [1][2]. - The forecast for 2024-2026 anticipates a compound annual growth rate (CAGR) of 33.1% for revenue and 67.1% for Non-GAAP net profit, reflecting robust growth prospects [2][3]. Financial Performance Summary - For Q1 2024, the company reported revenue of 5.5 billion USD, a year-on-year increase of 2.2%, with a gross margin of 46.8%, up 2.7 percentage points [1]. - Non-GAAP net profit for the same period was 1.03 billion USD, representing a 4.4% increase year-on-year, with diluted earnings per share of 0.62 USD [1][2]. - The guidance for the next quarter indicates a revenue midpoint of 5.7 billion USD, a year-on-year increase of 5.5% and a quarter-on-quarter increase of 3.6% [1]. Business Segment Analysis - Data center revenue grew by 80.5% year-on-year to 2.34 billion USD, primarily due to strong demand for server and AI processors [1]. - The client segment saw an 85.1% year-on-year revenue increase to 1.37 billion USD, driven by strong sales of Ryzen desktop CPUs [1]. - Gaming and embedded business revenues declined by 47.5% and 45.8% respectively, with expectations of a gradual recovery in the second half of the year due to improved FPGA sales [2]. Market Outlook - The global PC market is expected to show moderate growth in 2024, with the company anticipating a recovery in client business driven by increased demand and improved pricing [1][2]. - The MI300 series is projected to contribute 4 billion USD in revenue for the year, with an expected production capacity of 610,000 units and an average selling price of 9,400 USD [1][5].