We recently published 10 Stocks Jim Cramer Talked About.  Advanced Micro Devices, Inc. (NASDAQ:AMD) is one of the stocks on Jim Cramer talked about. Advanced Micro Devices, Inc. (NASDAQ:AMD) crossed Jim Cramer’s radar as he discussed AI chip giant NVIDIA. Along with NVIDIA, the firm also provides AI chips that are called accelerators. On December 22nd, Rosenblatt pointed out that server shipments confirmed Advanced Micro Devices, Inc. (NASDAQ:AMD)’s server CPU total addressable market estimates of $60 bil ...

Financial Data and Key Metrics Changes - AMD reported Q2 revenue of $7.7 billion, a 32% year-over-year increase, and guided Q3 revenue at $8.7 billion, representing a 28% year-over-year increase [4][5] - Data center revenue in Q2 was $3.2 billion, a 14% year-over-year increase, significantly impacted by MI 308 sales to China, which were not allowed in Q2 [5][6] - The company anticipates double-digit sequential growth in data center revenue for Q3, driven by the ramp of MI 350 [7][9] Business Line Data and Key Metrics Changes - The AI business is expected to see significant growth, with projections nearing $10 billion next year, driven by both existing and new customers [14][16] - The MI 350 ramp is expected to contribute to revenue growth, with strong customer interest noted [12][19] - The gross margin for the AI business is currently below the corporate average due to aggressive market share acquisition strategies [55][56] Market Data and Key Metrics Changes - The total addressable market (TAM) for AI has increased from $400 billion to over $500 billion, reflecting the growing demand for AI solutions [29][36] - AMD is engaged in over 40 active collaborations with various nations to explore sovereign AI opportunities, indicating a significant market potential [39][40] Company Strategy and Development Direction - AMD is focusing on expanding its AI business and enhancing its product offerings, including the upcoming launches of MI 400 and MI 500 [9][12] - The company aims to provide better total cost of ownership (TCO) for customers while maximizing gross margin dollars [55][66] - AMD is committed to supporting a diverse range of AI models, from foundational to smaller tier models, to cater to various customer needs [23][85] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the volatility in the AI business due to export controls affecting MI 308 sales, but expressed confidence in the long-term growth trajectory [46][48] - The company believes that the current AI adoption phase is just the beginning, with significant opportunities for growth in the coming years [90][88] Other Important Information - AMD's operational and supply chain teams are working closely with TSMC to ensure adequate wafer and memory supply to meet growing demand [25][26] - The company is navigating regulatory challenges related to AI sales in China, with plans to address the market if licenses are obtained [50][54] Q&A Session Summary Question: What is AMD's strategy regarding TCO? - AMD prioritizes performance as the key factor for TCO, ensuring competitive advantages in inferencing capabilities while also providing ASP benefits to enhance customer TCO [74][76] Question: Can you elaborate on the tier two and three workloads? - AMD is onboarding customers to deploy training on its infrastructure at scale, with a focus on preparing for future deployments [81][84] Question: What are AMD's views on overbuilding in the industry? - AMD sees ongoing CapEx spending and AI adoption as evidence of a growing market, emphasizing that the current phase of AI adoption is still in its early stages [88][90]