Why Is AMD Stock Soaring? | AMD Stock Deep Dive Part 2

요약 보기

AMD는 데이터센터에서 점유율을 확대 중이며, 에이전틱 AI 확산으로 CPU 중요성이 커지고 있다. 실적 후 주가가 약 17% 급등했고 경영진이 수년간 점유율 확대를 자신했다. 저자는 공정가치를 약 280달러로 올렸지만 현재 주가가 이보다 높아 과대평가로 보고 보유 의견을 유지한다.

다듬은 글

※ 자동 자막 원문(다듬기 전)

01. In part two of my deep dive into AMD stock, we're going to get a better understanding of why its share price is soaring and I'll update you on my fair value calculation and my buy, hold, or sell rating on this absolutely excellently performing semiconductor stock that's benefiting from the increasing deman, not only is the overall size of the pie increasing for semiconductors, but AMD CEO saying that AMD is gaining market share and that market share gain accelerated quarter over quarter.

02. And I've been talking about AMD's opportunity to gain market share for at least two years now. Remember back when Nvidia boasted an estimated 90% market share in the data center, I was suggesting that was unsustainable. I was suggesting how the customers of Nvidia feel uncomfortable giving Nvidia so much market power.

03. So, they were going to give opportunities to AMD to fill that second place, to give them a longer runway, more opportunity to capture a more meaningful part of that data center market. Even if AMD's products were inferior to Nvidia's products, that these hyperscalers, these big customers would continue giving AMD opportunities.

04. If for no other reason than just to diversify away from Nvidia, to lessen the market power, the negotiating power that Nvidia holds over the hyperscalers. And fast forward two years from then, that sentiment has proven to be true. AMD is gaining market share in the data center. Now, it's even better than what I was expecting as a result of developments in technology outside of the GPU accelerator.

05. AMD is also gaining share because the CPU is becoming more important in the data center. And their fifth generation epic Turin CPUs are continuing the strength built on top of their fourth gen. They're seeing a lot of demand from data center customers for these CPUs. But the reason why AMD share price is soaring by as much as it is, you can see the price action here on the day stock is up almost 17% up over $415 per share.

06. The reason why the share price is increasing by so much is not just because how strong this current quarter was, but because how optimistic the CEO and the management team were about the future of the company, not just the next quarter either, but for the next several years. And it begins with the CEO saying that we are well positioned to continue gaining market share.

07. This wasn't the one-off event. We feel confident in our product portfolio, in our value proposition, that we will continue gaining share. And their next generation product seems to be just what the market ordered, the right time with the right product. It they're calling it Verona, which is their first epic CPU, which has been custom designed for AI infrastructure.

08. Now, this is coming just as when the CPU is becoming critically more important in the data center. [snorts] The reason why it's becoming critically more important in the data center is because the way people are using and enterprises are using artificial intelligence with the agentic workflows, those prioritize CPUs.

09. CPUs are more important in the agentic workflow and GPUs were a lot more important in the training of large language models. But we've moved on from training to now inferencing and using those large language models and these uses require CPU performance more so than they require GPU performance or more so than they were used a few years ago when training was the primary use of data centers.

10. So, they're calling it Venice, which is one of the products within their Verano. It widens their competitive advantage delivering substantially higher performance per socket and per watt compared to the x86 offerings from Intel and more than 2x throughput per socket versus leading ARM-based AI solutions.

11. By the way, Intel and ARM are also experiencing significant growth as a result of increasing data center demand for CPUs. So, it's the overall size of the pie that's increasing but also AMD is gaining market share and taking a bigger slice of the pie. So, as a result of this fantastic quarter and the update to their longer-term outlook, I revised my fair value calculation for AMD stock up to $280 or $279 to be more precise.

12. This is up by almost $100 from my previous estimate just before the quarterly financial results. So, this was that significant of a quarter for AMD. It was a huge quarter because of not only what they delivered for the current results, but also the longer-term revisions higher that they provided, which was of course a more meaningful part to the valuation of the company.

13. If you provide an outlook for several years instead of just having a excellent one-off quarter. And so, I revised the intrinsic value higher, but it's still well below the market price. The stock still looks overvalued even though they're delivering excellent result. And so, I reiterated my hold rating on AMD stock.

14. But to learn more, I suggest watching the rest of my series. The next video in the series is popping up on your screen. Click that link and I'll see you over there shortly.