Advanced Micro Devices, Inc. AMD held its Analyst Day event on Thursday, when it issued commentary on financials and product pipeline.
The AMD Analyst: KeyBanc Capital Markets analyst John Vinh reiterated an Overweight rating and $150 price target on AMD shares.
The AMD Thesis: Following the event, KeyBanc is incrementally more constructive on AMD’s ability to sustain outsized growth of about 20%, analyst Vinh said in a note. The analyst also expects the company to gain market share at the expense of its rival Intel Corporation INTC in data center.
AMD reiterated its 2022 revenue guidance of $26.3 billion, representing 31% pro forma growth and margin guidance of 54%, the analyst noted. Strong data center, embedded and gaming consoles will likely offset weaker PC demand, he added.
The company maintained its long-term revenue growth guidance of 20% but increased its gross and operating margin expectations to 57% and 35%, respectively, from 50% plus and $20%, Vinh said.
The analyst also noted that the company sees increased cost synergies from its Xilinx acquisition.
On the product roadmap, Vinh noted AMD confirmed its next-gen server CPU Genoa processor will ramp up in the fourth quarter of 2022. It will boast of a 75% plus performance improvement over Milan, the analyst said. The cloud-optimized Bergamo will ramp in the first half of 2023, he added.
“With increased scale and profitability from the acquisition of XLNX and a continued focus on data center, we expect AMD to sustain outsized growth given secular growth in cloud and share gains,” KeyBanc said.
AMD Price Action: AMD shares were down 2.50% to $96.33, Friday morning according to Benzinga Pro data.