AMD Stock Update

AMD (NASDAQ:AMD) saw a modest stock increase of about 1% after CFO Jean Hu's positive presentation at the Barclays 22nd Annual Global Technology Conference.

Market Share Gains

Hu discussed AMD's significant gains in the server CPU market, boasting a market share of 34% in the last quarter, a remarkable increase from low single digits in prior years. This growth is attributed to AMD's steadfast commitment to innovation through generations, from the first-generation Naples to the current Genoa series, and the upcoming Zen 5 (Turin) family.

Success in PC Market

In the PC sector, AMD achieved a market share of 27% for desktops and 19% for mobile in Q3. The company attributes this success to strong customer relationships and technological leadership.

Challenges in Enterprise Server Market

Despite progress, Hu noted AMD's limited presence in the enterprise server market compared to its cloud market. She emphasized the necessity of distinct marketing strategies for convincing CIOs about AMD's total cost of ownership advantages. The growth of field application engineers (FAEs) has resulted in double-digit growth in enterprise business for the last five quarters. With the arrival of Turin in Q4, AMD anticipates continued growth into next year.

Competitive Landscape

Addressing competition, Hu expressed confidence that competitors will maintain performance, while AMD focuses on sustaining its competitive edge. The transition to ARM-based PCs has had minimal impact, as customers prioritize performance and efficiency, strengths of AMD products.

Growth in Data Center GPU Market

Hu highlighted the data center GPU market, forecasting revenue growth from zero to $5 billion by 2024, supported by a strong product lineup for 2025. The acquisition of ZT Systems aims to enhance AMD's system-level solutions and tap into the AI infrastructure market.

Embedded Business and Recovery

In the embedded sector, Hu reported stabilization in Q4 after a dip in Q3, with gradual recovery expected in 2025 alongside diverse design wins and a focus on mid-to-high-end FPGA solutions.

Future Outlook and R&D Investment

Finally, Hu discussed AMD's operating model, stating that R&D investments will remain robust to support long-term roadmaps. Operating expense growth is projected to be lower than revenue growth to maximize operational efficiency.

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