AMD Stock Analysis (with Latest ER)

Earnings Highlights

• First quarter consolidated revenue was $5.9 billion, up 71%
• Excluding Xilinx, revenue grew 55% year-over-year to a record $5.3 billion.
• Record top and bottom-line financial results driven by the close of our Xilinx acquisition.
• Increased net income by more than 60% year-over-year for the last ten quarters.
• Saw a significantly larger TAM opportunity based on broad a portfolio of compute engines and expanded solutions capabilities.
• Closed strategic acquisition of Xilinx and announced plans to acquire Pensando

Outlook

• For the second quarter of 2022, expect an increase of approximately 69% year-over-year and approximately 10% quarter-over-quarter.
• Expect annual revenue to grow by approximately 60% year-over-year, up from the approximately 31% growth we guided at the beginning of the year.
• The quarter-over-quarter increase is expected to be primarily driven by Xilinx revenue and server revenue.

Products

AMD’s Markets and Products

Detailed Revenue

• AMD revenue has been growing quickly in the past two years.
• 20% CAGR moving forward is much slower than the previous rates.

Financial Health

Strategies

• Build the best portfolio of high-performance and adaptive computing engines in the industry.
• Sell diversified products, which could increase synergies and lower risks.
• Integrate Xilinx’s differentiated AI engine across our CPU product portfolio to enable industry-leading inference capabilities.

Moat

• AMD’s diversified portfolio might create some network effects if customers want to consolidate the vendors.

Risks

• Forward revenue CAGR is only~20%

Catalysts

• Data Center, AI, Automotive, and Embedded markets are all trending right now.
• Xilinx and Pensando's acquisition could bring strong synergy and momentum.

Conclusion

BULLISH in both the short term and long term.

• AMD products are well positioned for multiple hottest markets (Datacenter, HPC, AI, etc.), where demands are still larger than supplies.
• AMD’s finance looks healthy and its valuation looks reasonable.
• Given the great track record of AMD CEO Lisa Su, it is convincing that AMD will continue to grow quickly in the near future.