Where Will AMD Stock Be in 3 Years?

Motley Fool2023-10-26

KEY POINTSAMD may emerge as a formidable competitor to Nvidia in the $150 billion AI chip market.Increasing adoption of its fourth-generation EPYC server chips is driving AMD's share in the data ...

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uppercut
·2023-10-26
who's to know what in the world happens in 3yrs-is a long time for stock traders, maybe market crashes, world war(s) effect etc
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$150 billion AI chip market.Increasing adoption of its fourth-generation EPYC server chips is driving AMD's share in the data ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/10/25/where-will-amd-stock-be-in-3-years/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0820562030.AUD","symbol_name":"ALLIANZ INCOME AND GROWTH \"AMH2\" (AUDHDG) H2 INC","start_time":0,"source_url":"https://www.fool.com/investing/2023/10/25/where-will-amd-stock-be-in-3-years/","article_id":"2378983041","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2378983041","pubTimestamp":1698287400,"sourceInfo":{"source_id":"fool_stock","name":"Motley Fool"},"weMediaInfo":null,"summary":"Artificial intelligence (AI) represents the next frontier of growth for 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A leading chip designer, the company posted a 13.8% year-over-year decline in revenues in the first half of the year, mainly driven by weakness in the personal computing business.Despite those disappointing sales figures, the narrative has slowly started shifting for the better. The latter half of 2023 is expected to show a promising recovery, especially with Micron claiming that chip inventory levels and pricing bottomed in the second quarter. If true, the market can expect rising demand for CPUs and GPUs in areas such as gaming, data center, and automotive industries. AMD is also gearing up to make its presence felt in the artificial intelligence (AI) GPU market, which AMD management estimates will be worth $150 billion by 2027.In this context, considering AMD's long-term growth prospects and valuation, let's assess the reasons why it will make sense for retail investors to open a position in AMD and hold it at least for the next three years.AI GPU market opportunityThe AI GPU market has been growing at a very rapid clip, thanks to robust demand from hyperscale data centers running high-performance computing workloads and complex AI algorithms. Although Nvidia's chips account for more than 90% of the AI GPU market, AMD may soon emerge as the second dominant player in it.The upcoming launch of AMD's MI300 GPU series (slated to go into production in the fourth quarter) is expected to prove a game-changer for the company. The MI300 boasts the largest memory bandwidth in the semiconductor industry. This makes the chip well suited for AI inferencing workloads, wherein generative AI models are used to analyze and predict from real-time data across use cases. Hence, while Nvidia is a leading presence in the training of generative AI models, AMD can position itself as a force to be reckoned with in the inferencing niche.AMD is also working to strengthen its software offerings, organically and inorganically. Its Radeon Open Compute (ROCm) open-source software platform, used to program its CPUs and GPUs, has been lately witnessing several performance and feature updates. Its acquisition of leading AI software player Mipsology will also enable the company to effectively program its AI chips for inferencing -- thereby enabling it to provide holistic hardware-software solutions for AI implementations. AMD also acquired Nod.ai, a leader in open-source AI technology, for developing versatile and efficient AI solutions.AMD's increasing presence in the data center marketAMD has already built a solid presence in the CPU and gaming GPU niches. The company is now focusing on further expanding its presence in the data center chip market, which Allied Market Research estimates will grow annually at a compound average rate of 14.6% over the next decade, from $11.7 billion in 2022 to $45.3 billion in 2032.AMD's fourth-generation EPYC CPU chips have been making rapid inroads in the data center market thanks to their impressive performance, efficiency, and cost-effectiveness. Built using Taiwan Semiconductor Manufacturing's 5nm manufacturing process, these CPUs have proved exceptional at handling several types of workloads.AMD ended the first quarter of 2023 with an 18% share of the server CPU market, up by 0.4 percentage points on a sequential basis. The company's successes can partly be attributed to the troubles faced by peer Intel, which was beset by multiple delays in its effort to launch its Sapphire Rapids server chips, which are being built with a 10nm manufacturing process. Originally scheduled to be launched in 2021, Intel managed to introduce the Sapphire Rapids chip only in early 2023.AMD's data center revenues, however, declined by 5.8% year over year to $2.6 billion in the first half of 2023, mainly due to softer enterprise demand and higher inventory levels of chips with some clients. Despite this, the company is now guiding for flat revenues for its data center segment in 2023 as it anticipates increasing adoption of fourth-generation EPYC processors as well as initial shipments of MI300 GPUs in the fourth quarter, when major AI, high-performance computing, and cloud customers will get early access to them.ProjectionsAMD currently trades at a price-to-sales multiple of 7.54, close to its five-year average multiple of 7.56. On average, analysts are projecting its revenues will be $35.3 billion in fiscal 2026, nearly 1.54 times its forecast revenue of $22.8 billion this year. Assuming that AMD's sales multiple holds steady at around its five-year average, the stock seems well positioned to grow by nearly 54% in the next three years.Considering its focus on its AI opportunities, and its growing presence in the lucrative data center market, AMD seems to present a promising long-term pick for retail investors.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[{"id":234470843355392,"gmtCreate":1698288456871,"gmtModify":1698289205562,"author":{"id":"4117107292947182","authorId":"4117107292947182","name":"uppercut","avatar":"https://community-static.tradeup.com/news/564e2a8ae65ea56799385913e8a3376e","vip":1,"crmLevel":8,"crmLevelSwitch":1},"htmlText":"who's to know what in the world happens in 3yrs-is a long time for stock traders, maybe market crashes, world war(s) effect etc","listText":"who's to know what in the world happens in 3yrs-is a long time for stock traders, maybe market crashes, world war(s) effect etc","text":"who's to know what in the world happens in 3yrs-is a long time for stock traders, maybe market crashes, world war(s) effect etc","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/234470843355392","repostId":2378983041,"repostType":2,"repost":{"id":"2378983041","pubTimestamp":1698287400,"share":"https://www.laohu8.com/m/news/2378983041?lang=&edition=full","pubTime":"2023-10-26 10:30","market":"us","language":"en","title":"Where Will AMD Stock Be in 3 Years?","url":"https://stock-news.laohu8.com/highlight/detail?id=2378983041","media":"Motley Fool","summary":"Artificial intelligence (AI) represents the next frontier of growth for AMD.","content":"<html><head></head><body><h2 id=\"id_1178161278\" style=\"text-align: start;\">KEY POINTS</h2><ul style=\"\"><li><p>AMD may emerge as a formidable competitor to Nvidia in the $150 billion AI chip market.</p></li><li><p>Increasing adoption of its fourth-generation EPYC server chips is driving AMD&#39;s share in the data center market.</p></li><li><p>The semiconductor titan&#39;s stock could rise even higher in the next three years.</p></li></ul><p><strong>Advanced Micro Devices</strong> (AMD) has faced its share of challenges in 2023, with the stock currently down by nearly 23% from its June highs. A leading chip designer, the company posted a 13.8% year-over-year decline in revenues in the first half of the year, mainly driven by weakness in the personal computing business.</p><p>Despite those disappointing sales figures, the narrative has slowly started shifting for the better. The latter half of 2023 is expected to show a promising recovery, especially with <strong>Micron</strong> claiming that chip inventory levels and pricing bottomed in the second quarter. If true, the market can expect rising demand for CPUs and GPUs in areas such as gaming, data center, and automotive industries. AMD is also gearing up to make its presence felt in the artificial intelligence (AI) GPU market, which AMD management estimates will be worth $150 billion by 2027.</p><p>In this context, considering AMD&#39;s long-term growth prospects and valuation, let&#39;s assess the reasons why it will make sense for retail investors to open a position in AMD and hold it at least for the next three years.</p><h2 id=\"id_1937814675\">AI GPU market opportunity</h2><p>The AI GPU market has been growing at a very rapid clip, thanks to robust demand from hyperscale data centers running high-performance computing workloads and complex AI algorithms. Although <strong>Nvidia</strong>&#39;s chips account for more than 90% of the AI GPU market, AMD may soon emerge as the second dominant player in it.</p><p>The upcoming launch of AMD&#39;s MI300 GPU series (slated to go into production in the fourth quarter) is expected to prove a game-changer for the company. The MI300 boasts the largest memory bandwidth in the semiconductor industry. This makes the chip well suited for AI inferencing workloads, wherein generative AI models are used to analyze and predict from real-time data across use cases. Hence, while Nvidia is a leading presence in the training of generative AI models, AMD can position itself as a force to be reckoned with in the inferencing niche.</p><p>AMD is also working to strengthen its software offerings, organically and inorganically. Its Radeon Open Compute (ROCm) open-source software platform, used to program its CPUs and GPUs, has been lately witnessing several performance and feature updates. Its acquisition of leading AI software player Mipsology will also enable the company to effectively program its AI chips for inferencing -- thereby enabling it to provide holistic hardware-software solutions for AI implementations. AMD also acquired Nod.ai, a leader in open-source AI technology, for developing versatile and efficient AI solutions.</p><h2 id=\"id_818787236\">AMD&#39;s increasing presence in the data center market</h2><p>AMD has already built a solid presence in the CPU and gaming GPU niches. The company is now focusing on further expanding its presence in the data center chip market, which Allied Market Research estimates will grow annually at a compound average rate of 14.6% over the next decade, from $11.7 billion in 2022 to $45.3 billion in 2032.</p><p>AMD&#39;s fourth-generation EPYC CPU chips have been making rapid inroads in the data center market thanks to their impressive performance, efficiency, and cost-effectiveness. Built using <strong>Taiwan Semiconductor Manufacturing&#39;s</strong> 5nm manufacturing process, these CPUs have proved exceptional at handling several types of workloads.</p><p>AMD ended the first quarter of 2023 with an 18% share of the server CPU market, up by 0.4 percentage points on a sequential basis. The company&#39;s successes can partly be attributed to the troubles faced by peer <strong>Intel</strong>, which was beset by multiple delays in its effort to launch its Sapphire Rapids server chips, which are being built with a 10nm manufacturing process. Originally scheduled to be launched in 2021, Intel managed to introduce the Sapphire Rapids chip only in early 2023.</p><p>AMD&#39;s data center revenues, however, declined by 5.8% year over year to $2.6 billion in the first half of 2023, mainly due to softer enterprise demand and higher inventory levels of chips with some clients. Despite this, the company is now guiding for flat revenues for its data center segment in 2023 as it anticipates increasing adoption of fourth-generation EPYC processors as well as initial shipments of MI300 GPUs in the fourth quarter, when major AI, high-performance computing, and cloud customers will get early access to them.</p><h2 id=\"id_1237181973\">Projections</h2><p>AMD currently trades at a price-to-sales multiple of 7.54, close to its five-year average multiple of 7.56. On average, analysts are projecting its revenues will be $35.3 billion in fiscal 2026, nearly 1.54 times its forecast revenue of $22.8 billion this year. Assuming that AMD&#39;s sales multiple holds steady at around its five-year average, the stock seems well positioned to grow by nearly 54% in the next three years.</p><p>Considering its focus on its AI opportunities, and its growing presence in the lucrative data center market, AMD seems to present a promising long-term pick for retail investors.</p></body></html>","source":"fool_stock","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Where Will AMD Stock Be in 3 Years?</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; 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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhere Will AMD Stock Be in 3 Years?\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-10-26 10:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.fool.com/investing/2023/10/25/where-will-amd-stock-be-in-3-years/><strong>Motley Fool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>KEY POINTSAMD may emerge as a formidable competitor to Nvidia in the $150 billion AI chip market.Increasing adoption of its fourth-generation EPYC server chips is driving AMD's share in the data ...</p>\n\n<a href=\"https://www.fool.com/investing/2023/10/25/where-will-amd-stock-be-in-3-years/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"BK4141":"半导体产品","LU0417517546.SGD":"Allianz US Equity Cl AT Acc SGD","LU0642271901.SGD":"Janus Henderson Horizon Global Technology Leaders A2 SGD-H","BK4503":"景林资产持仓","BK4551":"寇图资本持仓","LU0719512351.SGD":"JPMorgan Funds - US Technology A (acc) SGD","LU0056508442.USD":"贝莱德世界科技基金A2","LU0640476718.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQ \"AU\" (USD) ACC","LU0080751232.USD":"富达环球多元动力基金A","LU1242518857.USD":"FULLERTON LUX FUNDS - ASIA ABSOLUTE ALPHA \"I\" (USD) ACC","IE00BJJMRY28.SGD":"Janus Henderson Balanced A Inc SGD","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","IE00BMPRXN33.USD":"NEUBERGER BERMAN 5G CONNECTIVITY \"A\" (USD) ACC","BK4512":"苹果概念","BK4550":"红杉资本持仓","LU0820561909.HKD":"ALLIANZ INCOME AND GROWTH \"AM\" (HKD) INC","LU0234572021.USD":"高盛美国核心股票组合Acc","LU0109392836.USD":"富兰克林科技股A","LU0820562030.AUD":"ALLIANZ INCOME AND GROWTH \"AMH2\" (AUDHDG) H2 INC","BK4529":"IDC概念","LU1242518931.SGD":"Fullerton Lux Funds - Asia Absolute Alpha A Acc SGD","IE00BWXC8680.SGD":"PINEBRIDGE US LARGE CAP RESEARCH ENHANCED \"A5\" (SGD) ACC","LU0097036916.USD":"贝莱德美国增长A2 USD","LU0466842654.USD":"HSBC ISLAMIC GLOBAL EQUITY INDEX \"A\" (USD) ACC","LU0320765059.SGD":"FTIF - Franklin US Opportunities A Acc SGD","LU0689472784.USD":"安联收益及增长基金Cl AM AT Acc","LU1852331112.SGD":"Blackrock World Technology Fund A2 SGD-H","BK4515":"5G概念","IE00BD6J9T35.USD":"NEUBERGER BERMAN NEXT GENERATION MOBILITY \"A\" (USD) ACC","LU0198837287.USD":"UBS (LUX) EQUITY SICAV - USA GROWTH \"P\" (USD) ACC","LU0672654240.SGD":"FTIF - Franklin US Opportunities A Acc SGD-H1","BK4585":"ETF&股票定投概念","LU0786609619.USD":"高盛全球千禧一代股票组合Acc","BK4567":"ESG概念","LU1064131342.USD":"Fullerton Lux Funds - Global Absolute Alpha A Acc USD","LU0820561818.USD":"安联收益及增长平衡基金Cl AM DIS","AMD":"美国超微公司","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","BK4575":"芯片概念","BK4587":"ChatGPT概念","BK4566":"资本集团","LU1303367103.USD":"摩根大通多经理另类基金 A (acc)","LU2098885051.SGD":"JPMorgan Funds - Multi-Manager Alternatives A (acc) SGD","LU0234570918.USD":"高盛全球核心股票组合Acc Close","IE00BFSS7M15.SGD":"Janus Henderson Balanced A Acc SGD-H","BK4579":"人工智能","BK4588":"碎股"},"source_url":"https://www.fool.com/investing/2023/10/25/where-will-amd-stock-be-in-3-years/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2378983041","content_text":"KEY POINTSAMD may emerge as a formidable competitor to Nvidia in the $150 billion AI chip market.Increasing adoption of its fourth-generation EPYC server chips is driving AMD's share in the data center market.The semiconductor titan's stock could rise even higher in the next three years.Advanced Micro Devices (AMD) has faced its share of challenges in 2023, with the stock currently down by nearly 23% from its June highs. A leading chip designer, the company posted a 13.8% year-over-year decline in revenues in the first half of the year, mainly driven by weakness in the personal computing business.Despite those disappointing sales figures, the narrative has slowly started shifting for the better. The latter half of 2023 is expected to show a promising recovery, especially with Micron claiming that chip inventory levels and pricing bottomed in the second quarter. If true, the market can expect rising demand for CPUs and GPUs in areas such as gaming, data center, and automotive industries. AMD is also gearing up to make its presence felt in the artificial intelligence (AI) GPU market, which AMD management estimates will be worth $150 billion by 2027.In this context, considering AMD's long-term growth prospects and valuation, let's assess the reasons why it will make sense for retail investors to open a position in AMD and hold it at least for the next three years.AI GPU market opportunityThe AI GPU market has been growing at a very rapid clip, thanks to robust demand from hyperscale data centers running high-performance computing workloads and complex AI algorithms. Although Nvidia's chips account for more than 90% of the AI GPU market, AMD may soon emerge as the second dominant player in it.The upcoming launch of AMD's MI300 GPU series (slated to go into production in the fourth quarter) is expected to prove a game-changer for the company. The MI300 boasts the largest memory bandwidth in the semiconductor industry. This makes the chip well suited for AI inferencing workloads, wherein generative AI models are used to analyze and predict from real-time data across use cases. Hence, while Nvidia is a leading presence in the training of generative AI models, AMD can position itself as a force to be reckoned with in the inferencing niche.AMD is also working to strengthen its software offerings, organically and inorganically. Its Radeon Open Compute (ROCm) open-source software platform, used to program its CPUs and GPUs, has been lately witnessing several performance and feature updates. Its acquisition of leading AI software player Mipsology will also enable the company to effectively program its AI chips for inferencing -- thereby enabling it to provide holistic hardware-software solutions for AI implementations. AMD also acquired Nod.ai, a leader in open-source AI technology, for developing versatile and efficient AI solutions.AMD's increasing presence in the data center marketAMD has already built a solid presence in the CPU and gaming GPU niches. The company is now focusing on further expanding its presence in the data center chip market, which Allied Market Research estimates will grow annually at a compound average rate of 14.6% over the next decade, from $11.7 billion in 2022 to $45.3 billion in 2032.AMD's fourth-generation EPYC CPU chips have been making rapid inroads in the data center market thanks to their impressive performance, efficiency, and cost-effectiveness. Built using Taiwan Semiconductor Manufacturing's 5nm manufacturing process, these CPUs have proved exceptional at handling several types of workloads.AMD ended the first quarter of 2023 with an 18% share of the server CPU market, up by 0.4 percentage points on a sequential basis. The company's successes can partly be attributed to the troubles faced by peer Intel, which was beset by multiple delays in its effort to launch its Sapphire Rapids server chips, which are being built with a 10nm manufacturing process. Originally scheduled to be launched in 2021, Intel managed to introduce the Sapphire Rapids chip only in early 2023.AMD's data center revenues, however, declined by 5.8% year over year to $2.6 billion in the first half of 2023, mainly due to softer enterprise demand and higher inventory levels of chips with some clients. Despite this, the company is now guiding for flat revenues for its data center segment in 2023 as it anticipates increasing adoption of fourth-generation EPYC processors as well as initial shipments of MI300 GPUs in the fourth quarter, when major AI, high-performance computing, and cloud customers will get early access to them.ProjectionsAMD currently trades at a price-to-sales multiple of 7.54, close to its five-year average multiple of 7.56. On average, analysts are projecting its revenues will be $35.3 billion in fiscal 2026, nearly 1.54 times its forecast revenue of $22.8 billion this year. Assuming that AMD's sales multiple holds steady at around its five-year average, the stock seems well positioned to grow by nearly 54% in the next three years.Considering its focus on its AI opportunities, and its growing presence in the lucrative data center market, AMD seems to present a promising long-term pick for retail investors.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":10,"commentSize":1,"repostSize":2,"favoriteSize":1,"likeStatus":false,"favoriteStatus":false}}