03 May 2023
If you are covering AMD’s results, please see the following comment from Ben Barringer, equity research analyst at Quilter Cheviot:
"AMD’s numbers were a mixed bag but ultimately the business is executing well. Its PC business is going through an inventory correction and will be down 10% in 2023 but this is likely to improve in the second half of the year after recovering from a massive demand bubble bursting in this space during COVID.
"Its Cloud business is growing but at a slower rate than hoped but again is likely to improve in the near future. The world of gaming consoles continues to strengthen, and the company is well positioned to take advantage of this as they make the chips that go into Xbox and PlayStation.
"So while the company’s guide is for flat revenue, which is 4% behind the consensus, there is a lot going on in that flat number with its business units either doing well or suffering due to external market forces.
"One significantly positive area for the business is its acquisitions of Xilinx. Historically, AMD has been a PC and server-centric business competing with the likes of Intel, but this acquisition helps them compete in new areas such as telecoms and automobiles.
"However, the real story for the business is its suite of new products. It’s new product Mi300 will help to solidify the company in the Artificial Intelligence space and take share from rival NVIDIA. When you train an AI model you use GPUs for training, which need specific and powerful chips and then more GPUs and CPUs for its output also called inference. This new chip can do both elements giving it an edge.
"While revenues were down 9% overall this AI element of their business is yet to take off fully and its possible if not probable that AMD will start to become competitive players in this space leading to an uptick in the revenue growth and share price."
