In a recent update, JPMorgan analyst Harlan Sauer said he thinks AMD could increase its revenue from data center GPUs to more than $5 billion in the current fiscal year.
The company is still “taking share from Intel in servers and PCCPUs,” the analyst said in a report dated Wednesday.
Sur reported that the company’s data center GPU revenue exceeded $1 billion for the quarter, beating JPMorgan’s own estimate of $900 million. Sur attributed this to a “rapid ramp for its MI300A/X products with HPC and cloud/hyperscale customers.”
While promising Q2 earnings, Sur has set a $180 price target for AMD stock through 2025. From its current price of $138.44 (as of July 30, 2024), it suggests a 30% upside.
AMD’s Impressive Q2 Earnings Analysis
It would be an understatement to say that AMD’s June quarter results, which were released recently, were impressive. Sur reported a strong 21% increase in data center growth compared to the previous quarter, with a significant contribution from both GPUs and server CPUs.
As expected, the gaming industry was somewhat disappointing, but the 9% increase in PC client shipments more than made up for it. This performance exceeded expectations, highlighting AMD’s continued progress in a fiercely competitive market.
AMD reported total revenue of $5.8 billion during the quarter, which was higher than the $5.7 billion forecast by analysts. Their $2.83 billion in revenue from their data center division—a 115% increase from last year—is largely responsible for this impressive performance.
Forecast Improved On MI300X; AMD Stock Is Optimistic
Sur has revised its forecast for AMD’s revenue from data center GPUs, raising the target from $4 billion to $4.5 billion+ by 2024.
Thanks to a positive supply chain and quick customer uptake of its MI300X GPUs—which are gaining popularity among high-performance computing and cloud users—Sur thinks AMD could actually reach $5 billion.
That’s not all, though. AMD is forecast to end this year with a 35-36% market share in the server CPU segment, a significant increase from its 29% share last year.
As AMD continues to outpace Intel, particularly in the PC and server CPU markets, Sur credits the company’s competitive advantage in server technology. Additionally, Ryzen desktop and mobile processors contributed to client revenue reaching $1.49 billion, a 49% increase over last year.
Sur maintains its recommendation on AMD at neutral, noting potential upside if the firm continues to successfully execute on its plan. As artificial intelligence (AI) rapidly drives technological advancements, AMD is ideally positioned to ride the wave and capture a larger share of the market.
Alena James is a technology lover who is impassioned about investigating the most recent developments and trends in the digital realm. With an exceptional ability to simplify sophisticated ideas, her mission is to ensure that technology is accessible to all. Observations and updates on everything technological are provided in a straightforward manner.
