AMD Maintains Positive Rating Despite Lack of Major Customers for AI Chip
June 20, 2023
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Advanced Micro Devices ($NASDAQ:AMD) (AMD) is an American semiconductor manufacturer based in Santa Clara, California. They are the producer of processors, motherboards, graphic cards and other technology components. Despite not having any major customers announced for its new AI chip recently, AMD’s rating has recently been maintained by Well Fargo. The chip, which is code-named “Eagle”, is AMD’s first foray into Artificial Intelligence (AI) technology. This state-of-the-art chip contains deep learning capabilities and is designed to be used in data centers.
Despite not having any customers announced so far for this product, Well Fargo maintained its “overweight” rating for AMD. They cited the potential for growth that the chip has due to its AI capabilities. They still believe that the chip has potential and could be successful once it has customers. AMD’s venture into AI technology is just the first step in what could potentially be a strong product lineup.
Market Price
The company’s stock opened at $126.5 and closed at $127.3, up by 2.2% from the previous day’s closing price of $124.5. AMD remains committed to producing quality products and investing in research and development. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for AMD. More…
| Total Revenues | Net Income | Net Margin |
| 23.07k | 395 | 1.7% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for AMD. More…
| Operations | Investing | Financing |
| 3.06k | -2.4k | -1.57k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for AMD. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 67.63k | 12.94k | 33.98 |
Key Ratios Snapshot
Some of the financial key ratios for AMD are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 47.1% | -39.8% | 1.1% |
| FCF Margin | ROE | ROA |
| 10.9% | 0.3% | 0.2% |
Analysis
GoodWhale has conducted an extensive analysis of ADVANCED MICRO DEVICES’ wellbeing and found the company to be strong in asset, growth, and profitability. However, they were weak in dividend. Based on our Star Chart, we have classified ADVANCED MICRO DEVICES as a ‘gorilla’, a type of company that is able to achieve stable and high revenue or earning growth due to its strong competitive advantage. Given these positive indicators, we believe that ADVANCED MICRO DEVICES would be attractive to many types of investors, such as value investors, growth investors, and dividend investors. What’s more, ADVANCED MICRO DEVICES has a high health score of 8/10 with regard to its cashflows and debt, making it capable of safely riding out any crisis without the risk of bankruptcy. More…
Peers
Advanced Micro Devices Inc. (AMD) is an American multinational semiconductor company based in Sunnyvale, California, that develops computer processors and related technologies for business and consumer markets. Its main competitors are Micron Technology Inc., Intel Corp., and Marvell Technology Inc.
– Micron Technology Inc ($NASDAQ:MU)
Founded in 1978, Micron Technology is one of the world’s leading manufacturers of computer memory and semiconductor devices. The company’s products include DRAM, NAND flash memory, CMOS image sensors, and other semiconductor components. Micron’s common stock is traded on the Nasdaq Global Select Market under the ticker symbol “MU.”
As of 2022, Micron Technology had a market capitalization of $57.13 billion. The company’s return on equity was 12.3%.
Micron Technology is a leading manufacturer of computer memory and semiconductor devices. The company’s products include DRAM, NAND flash memory, CMOS image sensors, and other semiconductor components. Micron’s common stock is traded on the Nasdaq Global Select Market under the ticker symbol “MU.”
– Intel Corp ($NASDAQ:INTC)
Intel Corp is an American multinational corporation and technology company that specializes in the manufacture and sale of semiconductor chips. It is the world’s largest semiconductor chip maker, with a market share of over 60%. The company also makes motherboard chipsets, network interface controllers, integrated circuits, flash memory, graphic chips, embedded processors, and other devices related to communications and computing.
Intel has a market capitalization of over $100 billion and a return on equity of 19.16%. The company has been profitable every year since 1986 and has a history of paying dividends. Intel is a component of the Dow Jones Industrial Average and is one of the 30 companies that make up the Dow Jones Industrial Average.
– Marvell Technology Inc ($NASDAQ:MRVL)
As of 2022, Marvell Technology Inc has a market cap of 32.18B and ROE of 0.5%. The company is a leading provider of semiconductor solutions.
Summary
Advanced Micro Devices (AMD) has recently released a new AI chip, but has not named any major customers yet. Despite this, the rating of AMD at Well Fargo has remained unchanged. This indicates that the ratings agency is optimistic about AMD’s long-term growth potential, and believes that the company will likely be able to secure major customers for its new chip. The lack of an immediate boost in customer base may cause AMD’s stock price to be more volatile in the short-term, however long-term investors should remain optimistic about AMD’s prospects.
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