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Advanced Micro Devices Inc. (Amd)

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Ear Tan
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148 views14 pages

Advanced Micro Devices Inc. (Amd)

Uploaded by

Ear Tan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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ADVANCED

MICRO DEVICES
INC. (AMD)
AMD
• Makers of the world’s most powerful processors’ and power
devices of all shapes and sizes, from supercomputers to game
consoles.

• AMD gets most of its revenue from the computing and


graphics segment, through which it sells its Ryzen central
processing units (CPUs) and Radeon graphics processing units
(GPUs). The segment's revenue is directly related to the health
of the PC market, as well as the data center space, where
graphics cards are deployed for accelerating workloads.
AMD Business Model
Market Update
• Pre-2020 GPU shortages trace back in the near term to limited
yields on GPUs and cryptocurrency-related demand.
• Due to the pandemic, chromebook and tablet sales boom, and
we kick off the biggest year for PC demand in a decade,
putting added pressure on chip makers.
• With most of these GPU sales happening online, scalpers
quickly crash the party, tapping into bots that can snap up
available inventory before the average person has time to click
"add to cart." We speak to people selling access to their bots
for a couple hundred bucks.
• The shortage can last until 2023
Market Share
Advanced Micro Devices' biggest business is booming and it is taking away market
share from Intel. AMD is benefiting from a mix of higher volumes and stronger
pricing in the client processor market. This isn't surprising, as the chipmaker has
been eating away at Intel's (NASDAQ:INTC) dominance in the CPU space.
Price Chart
AMD Financial Data
• Revenue was $3.85 billion, up 99 percent year-over-year and 12 percent quarter-
over-quarter driven by higher revenue in both the Computing and Graphics segment
and Enterprise and Embedded and Semi-custom segment.

• Gross margin was 48 percent, up 4 percentage points year-over-year and 2


percentage points quarter-over-quarter. The increases were driven by a richer mix of
sales, including high-end Ryzen™, Radeon™ and EPYC™ processor sales.

• For the third quarter of 2021, AMD expects revenue to be approximately $4.1
billion, plus or minus $100 million, an increase of approximately 46 percent year-
over-year and approximately 6 percent quarter-over-quarter. The year-over-year
increase is expected to be driven by growth across all businesses. The quarter-over-
quarter increase is expected to be primarily driven by growth in AMD’s data center
and gaming businesses.
Industry Analysis
AMD Industry

P/E Ratio TTM 39.73 37.86


Price to Sales TTM 10.12 9.15
Price to Cash Flow MRQ 173.78 160.21
Price to Free Cash Flow TTM 54.78 50.55
Price to Book MRQ 19.11 10.05
Price to Tangible Book MRQ 20.55 14.17
Revenue/Share TTM 10.88 23.6
Basic EPS ANN 2.1 3.62
Return on Equity TTM 66.27% 27.43
Return on Assets TTM 39.69% 14.38
Return on Investment TTM 57.38% 16.65
Return on Investment 5YA 10.59% 14.34
Current Ratio MRQ 2.7 2.8
LT Debt to Equity MRQ 4.43% 59.13
Total Debt to Equity MRQ 4.43% 63.23
AMD Valuation - DCF Model
• Discount Rate 10%
• Shares outstanding 1.215 billion
• Growth Rate 30%, 40%, 50%
• Perpetual Growth Rate 2% *

*same as US GDP growth rate

Terminal Value:
30% Growth Rate
40% Growth Rate
50% Growth Rate
• Buy around $95-97. Part of your holdings can take profit
around $107 and the other part can have a long position.

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