tiprankstipranks
Trending News
More News >
Advanced Micro Devices (AMD)
NASDAQ:AMD

Advanced Micro Devices (AMD) AI Stock Analysis

Compare
78,161 Followers

Top Page

AM

Advanced Micro Devices

(NASDAQ:AMD)

72Outperform
AMD's overall score reflects its solid financial performance and positive earnings call guidance, offset by a high valuation and mixed technical indicators. The company's strategic moves in AI and data center expansion are promising, but high P/E ratio and technical headwinds warrant caution.
Positive Factors
Acquisition Impact
AMD's acquisition of ZT Systems is seen as favorable for the execution of its roadmap at speed to compete with industry peers.
Financial Performance
The acquisition is expected to be non-GAAP accretive by the end of the year, enhancing AMD's financial performance.
Market Share Growth
AMD is seeing strong growth potential in its AI GPU business, with significant customer engagement and orders from major companies.
Negative Factors
Earnings Impact
The acquisition as a whole should be dilutive in FY25, indicating a potential short-term negative impact on earnings.
Investor Concerns
Investors need to hear more about AMD's Infinity Fabric network capabilities to understand its vision for extending capabilities in scale-up and scale-out architectures.

Advanced Micro Devices (AMD) vs. S&P 500 (SPY)

Advanced Micro Devices Business Overview & Revenue Model

Company DescriptionAdvanced Micro Devices (AMD) is a leading global semiconductor company that designs and manufactures computer processors and related technologies. Founded in 1969 and headquartered in Santa Clara, California, AMD operates in the technology sector, focusing on developing high-performance computing, graphics, and visualization technologies. Its core products include central processing units (CPUs), graphics processing units (GPUs), and custom chip solutions for various applications, including gaming, data centers, and embedded systems.
How the Company Makes MoneyAMD makes money primarily through the sale of its semiconductor products, which include CPUs, GPUs, and custom chip solutions. The company divides its operations into two main segments: Computing and Graphics, and Enterprise, Embedded, and Semi-Custom. In the Computing and Graphics segment, AMD generates revenue from the sale of processors and graphics cards to PC manufacturers and consumers. The Enterprise, Embedded, and Semi-Custom segment includes sales of server processors and technology for game consoles and other embedded applications. AMD also benefits from strategic partnerships and collaborations with major technology companies, which help expand its market reach and drive innovation. Licensing of its intellectual property, although a smaller part of its revenue model, also contributes to its earnings.

Advanced Micro Devices Financial Statement Overview

Summary
AMD exhibits strong financial health, characterized by robust revenue growth, efficient cost management, and a stable balance sheet. The company is well-positioned in the semiconductor industry with solid cash flow generation. Potential areas for improvement include enhancing net profitability and optimizing cash conversion.
Income Statement
85
Very Positive
AMD has demonstrated strong revenue growth over the years, with a notable increase from 2023 to TTM. The gross profit margin has also improved, showcasing effective cost management. However, while the net profit margin has increased, it remains modest, indicating room for enhanced profitability. The EBIT and EBITDA margins are stable, reflecting healthy operational efficiency.
Balance Sheet
80
Positive
The balance sheet is robust, marked by a low debt-to-equity ratio, indicating conservative leverage. Return on equity is positive, but there's potential for higher returns. The high equity ratio suggests a strong financial structure, providing stability and resilience against market fluctuations.
Cash Flow
75
Positive
Cash flow generation is solid, with operating cash flow and free cash flow showing an upward trend. Free cash flow growth is notable, indicating efficient capital expenditure management. However, the operating cash flow to net income ratio suggests potential for improved cash conversion efficiency.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
25.79B22.68B23.60B16.43B9.76B
Gross Profit
12.72B10.46B12.05B7.93B4.35B
EBIT
1.90B401.00M1.26B3.65B1.37B
EBITDA
1.90B4.15B5.53B4.17B1.68B
Net Income Common Stockholders
1.64B854.00M1.32B3.16B2.49B
Balance SheetCash, Cash Equivalents and Short-Term Investments
5.13B5.77B5.86B3.61B2.29B
Total Assets
69.23B67.89B67.58B12.42B8.96B
Total Debt
491.00M3.00B3.17B661.00M531.00M
Net Debt
-3.30B-930.00M-1.66B-1.87B-1.06B
Total Liabilities
11.66B11.99B12.83B4.92B3.13B
Stockholders Equity
57.57B55.89B54.75B7.50B5.84B
Cash FlowFree Cash Flow
2.40B1.12B3.12B3.22B777.00M
Operating Cash Flow
3.04B1.67B3.56B3.52B1.07B
Investing Cash Flow
-1.10B-1.42B2.00B-686.00M-952.00M
Financing Cash Flow
-2.06B-1.15B-3.26B-1.90B6.00M

Advanced Micro Devices Technical Analysis

Technical Analysis Sentiment
Negative
Last Price85.76
Price Trends
50DMA
107.08
Negative
100DMA
118.63
Negative
200DMA
136.34
Negative
Market Momentum
MACD
-0.52
Negative
RSI
44.58
Neutral
STOCH
18.45
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMD, the sentiment is Negative. The current price of 85.76 is below the 20-day moving average (MA) of 102.90, below the 50-day MA of 107.08, and below the 200-day MA of 136.34, indicating a bearish trend. The MACD of -0.52 indicates Negative momentum. The RSI at 44.58 is Neutral, neither overbought nor oversold. The STOCH value of 18.45 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMD.

Advanced Micro Devices Risk Analysis

Advanced Micro Devices disclosed 45 risk factors in its most recent earnings report. Advanced Micro Devices reported the most risks in the “Tech & Innovation” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Advanced Micro Devices Peers Comparison

Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$140.97B13.6241.96%2.67%12.13%36.17%
75
Outperform
$2.30T32.10119.18%0.04%114.20%146.26%
TSTSM
74
Outperform
$734.69B20.8429.96%1.32%29.98%35.76%
AMAMD
72
Outperform
$138.97B85.492.89%13.69%91.75%
TXTXN
65
Neutral
$137.75B29.1428.25%3.51%-10.72%-26.60%
57
Neutral
$18.54B9.84-14.38%2.71%5.07%-23.65%
52
Neutral
$86.56B-18.31%2.52%-2.08%-1212.72%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AMD
Advanced Micro Devices
85.76
-84.14
-49.52%
INTC
Intel
19.85
-17.74
-47.19%
NVDA
Nvidia
94.31
7.21
8.28%
QCOM
Qualcomm
127.46
-42.75
-25.12%
TSM
TSMC
146.80
5.56
3.94%
TXN
Texas Instruments
151.39
-13.46
-8.16%

Advanced Micro Devices Earnings Call Summary

Earnings Call Date: Feb 4, 2025 | % Change Since: -28.23% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance in AMD's data center and client segments, with significant growth driven by AI and server products. However, challenges remain in the gaming and embedded segments, which experienced notable declines. Overall, the positive growth in key areas outweighs the lowlights, positioning AMD well for continued success in 2025.
Highlights
Record Annual Revenue and Growth
AMD reported record annual revenue of $25.8 billion, up 14%, driven by significant growth in the data center and client segments.
Data Center Segment Growth and AI Expansion
Data center revenue increased 69% year-over-year to a record $3.9 billion, with strong adoption of EPYC CPUs and MI300X deployments expanding with major cloud partners.
Client Segment Performance
Client segment revenue increased 58% year-over-year to a record $2.3 billion, driven by strong demand for Ryzen processors and record OEM PC sell-through.
Strong AI Business Development
AMD's data center AI business delivered greater than $5 billion in revenue for the year, with major wins in AI deployments and progress in AI software and hardware roadmaps.
Gross Margin and Earnings Growth
Gross margin expanded by 300 basis points to 54%, and earnings per share grew 25% year-over-year, demonstrating strong operating leverage.
Lowlights
Gaming Segment Revenue Decline
Gaming segment revenue declined 59% year-over-year to $563 million due to decreased semi-custom sales and accelerated sellout in preparation for new GPU launches.
Embedded Segment Revenue Decline
Embedded segment revenue decreased 13% year-over-year to $923 million, with mixed demand across markets and a slower-than-expected overall market recovery.
Company Guidance
During the AMD fourth quarter and full year 2024 conference call, the company provided substantial guidance on its financial performance and projections. AMD reported record annual revenue of $25.8 billion, representing a 14% increase year-over-year, with significant contributions from its data center segment, which grew 94% to total $3.9 billion in the fourth quarter alone. The client segment also saw substantial growth, with revenue increasing 52% year-over-year to $2.3 billion. The company achieved a gross margin of 54% for the quarter, up 330 basis points from the previous year, and delivered a net income growth of 26% annually. Looking forward to 2025, AMD expects double-digit revenue and EPS growth, with first-quarter revenue projected at $7.1 billion, reflecting a 30% increase year-over-year, although a 7% sequential decrease due to seasonality. The data center segment is anticipated to grow strongly, driven by new product introductions like the MI350 series GPUs and a continued focus on AI, with potential for the data center AI business to expand from over $5 billion in 2024 to tens of billions in the coming years.

Advanced Micro Devices Corporate Events

M&A TransactionsBusiness Operations and Strategy
AMD Completes Acquisition of ZT Systems for AI Expansion
Positive
Mar 31, 2025

On March 31, 2025, AMD announced the completion of its acquisition of ZT Systems, a leading provider of AI and general-purpose compute infrastructure for hyperscale providers. This strategic move aims to enhance AMD’s capabilities in delivering end-to-end AI solutions by integrating ZT Systems’ expertise with AMD’s CPU, GPU, and networking technologies. The acquisition is expected to accelerate AMD’s AI infrastructure deployment and provide a competitive edge in the $500 billion data center AI accelerator market projected for 2028. The transaction is anticipated to be accretive on a non-GAAP basis by the end of 2025, and AMD is exploring strategic partnerships to divest ZT Systems’ manufacturing business.

Executive/Board Changes
AMD Approves Executive Bonuses for Fiscal Year 2024
Positive
Feb 24, 2025

On February 18 and 19, 2025, Advanced Micro Devices, Inc.’s Board of Directors approved annual cash performance bonuses for its executive officers under the Executive Incentive Plan for fiscal year 2024. The bonuses, which are expected to be paid in March 2025, include $670,106 for Jean Hu, $665,593 for Phil Guido, $658,825 for Forrest Norrod, and $1,776,120 for Lisa T. Su. These awards reflect the company’s commitment to recognizing and rewarding the contributions of its leadership team, potentially impacting the company’s operational focus and stakeholder confidence.

Business Operations and StrategyFinancial Disclosures
AMD Achieves Record Revenue Driven by Data Center
Positive
Feb 4, 2025

In its financial results for the fourth quarter and full year 2024, AMD reported record revenue and earnings growth, driven largely by its Data Center segment where revenue nearly doubled due to increased adoption of EPYC processors and Instinct accelerators. Despite a decline in gaming and embedded segment revenues, AMD’s overall performance was strong, with a 24% year-over-year increase in fourth-quarter revenue and transformative annual growth across its portfolio, particularly in high-performance and adaptive computing.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.