2024-06-10 00:01:29 ET
Summary
- AMD is projected to gain market share from Nvidia in 2024 and has strong growth potential in the AI chip market, at least until FY26.
- Maturity and evolution of ML models expected from this year onwards will aid in TAM penetration. Advanced Micro Devices now expects $4 billion from the sales of MI300 series AI chips alone.
- AMD’s product roadmap in Computex 2024 and the switch to annual release cycles to put AMD in a better position to compete with Nvidia.
- The company’s stock is a bargain given its project revenue ramp and its 43x forward PE.
Investment Thesis
Advanced Micro Devices, Inc. (AMD) has been lagging the overall semiconductor complex of stocks so far in 2024, performing in line with the broader markets and delivering a ~14%, marginally higher than the 12% YTD performance of the S&P 500 index. In contrast, the overall iShares Semiconductor ETF ( SOXX ) has scored a 25% return so far, while the VanEck Semiconductor ETF ( SMH ) has recorded gains roughly three times faster than AMD's stock in 2024....
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For further details see:
AMD: Markets Underestimate The Potential For TAM Penetration/Expansion