Latest news with #InstinctAI
Economic Times
2 days ago
- Business
- Economic Times
AMD, Super Micro shares slide as AI bets falter on data center results miss
Reuters FILE PHOTO: The AMD logo is seen in this illustration taken August 3, 2025. REUTERS/Dado Ruvic/Illustration/File Photo Shares of chip company Advanced Micro Devices and server maker Super Micro Computer tumbled in premarket trading on Wednesday after the companies posted underwhelming results in their data center segments, shaking investor confidence in their AI growth narratives. AMD dropped 7%, while Super Micro plummeted about 17%. The selloff comes as chipmakers face mounting headwinds, including weak demand, rising inventories, and the threat of new U.S. tariffs on semiconductor imports, expected as early as next week. Last month, ASML, the world's biggest supplier of chip-making equipment, and TSMC, the world's main producer of advanced AI chips, and mobile chip designer Qualcomm also cautioned about tariff-related uncertainty. Analysts said that given the strength of the overall server market, Super Micro's disappointing results likely reflect market share losses to larger rivals SMCI peer Dell down about 3%. China drag, MI308 in spotlight AMD's data center unit, which includes its Instinct AI chips and server processors (CPUs), posted a 14% revenue rise to $3.2 billion in the second quarter, slightly below market expectations. "AI outlook did not show the sort of upside some investors were looking for," said Jefferies analysts. In contrast, Nvidia's data center segment jumped 73% to $39.11 billion in its fiscal first quarter. Chipmakers have benefited from Big Tech's AI spending spree, as these chips power their massive AI infrastructure, that has propelled AMD's shares to surge over 40% this year. In a post-earnings conference call, AMD CEO Lisa Su said the company's AI chip revenue declined year-over-year because of the U.S. restrictions on export of its MI308 chips to China. The company noted progress on export license reviews for the chips, but gave no clear timeline for lifting the restrictions. "Potential addback of MI308 revenues from lifting of export restrictions also appears to be more muted than market expectations," HSBC added. Super Micro: Margin squeeze, guidance miss Super Micro missed fourth-quarter estimates as it competes with larger rivals in AI server hardware, with execution missteps and Nvidia chip delays weighing on its performance. Analysts said any weakness in the high-expectation AI space tends to spark sharp investor backlash. "We expect better chip availability this fiscal year compared to the last two quarters, which will help us grow better," Super Micro CEO Charles Liang said on the post-earnings call. analysts noted that AI remains the "preeminent driver of sales growth," with over 70% of fourth-quarter revenue tied to AI platforms. Super Micro, seen as a proxy for Nvidia, and larger rival Dell have benefited from rising demand for AI servers, but the high cost of producing them and tough competition have pressured their margins. "Gross margin impact (for Super Micro this quarter) remains unclear," BofA analysts noted. AMD commands a higher forward price-to-earnings multiple of 32.39, compared to SMCI that trades at a more modest 19.69. Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. Berlin to Bharuch: The Borosil journey after the China hit in Europe FIIs are exiting while retail investors stay put. Will a costly market make them pay? BlackRock returns, this time with Ambani. Will it be lucky second time? Paid less than plumbers? The real story of freshers' salaries at Infy, TCS. Stock Radar: Down 27% from highs! Hero MotoCorp stock shows signs of momentum after breaking out from 11-week consolidation For those prepared for the long game: 5 mid-cap stocks from different sectors with an upside potential of 14 to 33% in one year Financial services: Time to look at a new set for the next cycle? 5 stocks from the financial services space with upside potential of up to 37% These 8 banking stocks can give more than 29% returns in 1 year, according to analysts
Yahoo
11-06-2025
- Business
- Yahoo
Can Advanced Micro Devices EPYC Drive Data Center Revenue Growth?
Advanced Micro Devices AMD is benefiting from its strong presence in the data center market, which is driven by the widespread adoption of its EPYC processors. In the first quarter of 2025, data center revenues surged 57.2% year over year to $3.674 billion, accounting for 49.4% of total revenues. The company's strong adoption of fifth-gen EPYC Turin processors and expanding Instinct AI accelerator deployments across hyperscalers and enterprises have also been major growth drivers for its success. Hyperscalers like AWS, Google, and Oracle launched more than 30 new EPYC-powered cloud instances, while enterprise adoption doubled among Forbes 2000 customers in the first quarter of processors are now deployed by all top 10 telecom, aerospace, and semiconductor companies. These processors are also gaining momentum in automotive, manufacturing, and energy sectors. AMD's expanding EPYC portfolio has been a key catalyst. The company recently announced that Nokia has adopted its fifth-gen EPYC 9005 Series processors for the Nokia Cloud Platform. These processors will enhance performance per watt for containerized workloads, which are important to 5G Core, edge, and enterprise applications. This integration supports telecom networks in meeting rising data demands while improving energy efficiency and reducing environmental impact. AMD faces stiff competition in the data center market from industry giants like Intel Corporation INTC and NVIDIA NVDA. Intel is heavily investing in technologies like its Xeon processors and AI accelerators to compete more effectively with AMD's EPYC server processors. Recently, Intel has expanded its AI and data center portfolio with the introduction of the Intel Xeon 5 processor. In the first quarter of 2025, Datacenter and AI Group revenues improved 8% year over year to $4.13 billion, driven by a solid demand for host CPUs for AI servers and storage is benefiting from the growing demand for generative AI and large language models using graphic processing units (GPUs) based on NVIDIA's Hopper and Blackwell architectures, which are aiding data center revenues. In the first quarter of fiscal 2026, data center jumped 73.3% year over year and 9.9% from the previous quarter to $39.1 billion. Advanced Micro Device shares have gained 1.4% year to date (YTD), underperforming the broader Zacks Computer & Technology sector's return of 2.4% and the Zacks Computer - Integrated Systems industry's increase of 16.7%. Image Source: Zacks Investment Research AMD stock is trading at a premium, with a forward 12-month Price/Sales of 5.86X compared with the industry's 3.59X. AMD has a Value Score of D. Image Source: Zacks Investment Research The Zacks Consensus Estimate for second-quarter 2025 earnings is pegged at 56 cents per share, which has declined 13.6% over the past 30 days, indicating an 18.84% decline year over year. Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote The consensus mark for 2025 earnings is pegged at $3.97 per share, which declined 2.9% over the past 30 days, suggesting 19.94% year-over-year currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Intel Corporation (INTC) : Free Stock Analysis Report Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report NVIDIA Corporation (NVDA) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
HSBC Upgrades Advanced Micro Devices (AMD) Stock to Hold, Lifts PT
On May 28, HSBC upgraded the rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) stock from Sell to Hold, increasing its price target from $75 to $100. Frank Lee from HSBC made this upgrade on AMD, citing the recent Saudi Arabia AI deal and easing of tariff tensions to be a positive development for the company. AMD posted better-than-expected results for the first quarter of 2025, driven by upbeat growth in the data center revenue. The Q1 results have revived investor sentiment for AMD stock. AMD posted a 36% increase in its Q1 revenue compared to the same period a year ago, reaching $7.4 billion. The revenue was driven by robust growth in the data center and client segments. The company experienced a 55% growth in net income, fueled by a higher percentage of data center product sales and a robust Ryzen processor mix. Data center segment revenue soared nearly 57% year-over-year, with major contributions from EPYC CPU and Instinct AI accelerator sales. Lee sees potential upside for AMD in the future from the deal between the U.S. and Saudi Arabia. The analyst also cited that AMD is 'appealing in terms of long-term total addressable market (TAM) opportunity.' Lee is optimistic about AMD's upcoming AI chips and said that the company can gain from the new product launches, getting in a position to fight competition from Intel. Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor company focused on high-performance computing, graphics, and visualization technologies. AMD operates four segments, including Data Center, Client, Gaming, and Embedded. While we acknowledge the potential of AMD to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMD and that has 100x upside potential, check out our report about this cheapest AI stock. Read Next: and . Disclosure. None. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
HSBC Upgrades Advanced Micro Devices (AMD) Stock to Hold, Lifts PT
On May 28, HSBC upgraded the rating on Advanced Micro Devices, Inc. (NASDAQ:AMD) stock from Sell to Hold, increasing its price target from $75 to $100. Frank Lee from HSBC made this upgrade on AMD, citing the recent Saudi Arabia AI deal and easing of tariff tensions to be a positive development for the company. AMD posted better-than-expected results for the first quarter of 2025, driven by upbeat growth in the data center revenue. The Q1 results have revived investor sentiment for AMD stock. AMD posted a 36% increase in its Q1 revenue compared to the same period a year ago, reaching $7.4 billion. The revenue was driven by robust growth in the data center and client segments. The company experienced a 55% growth in net income, fueled by a higher percentage of data center product sales and a robust Ryzen processor mix. Data center segment revenue soared nearly 57% year-over-year, with major contributions from EPYC CPU and Instinct AI accelerator sales. Lee sees potential upside for AMD in the future from the deal between the U.S. and Saudi Arabia. The analyst also cited that AMD is 'appealing in terms of long-term total addressable market (TAM) opportunity.' Lee is optimistic about AMD's upcoming AI chips and said that the company can gain from the new product launches, getting in a position to fight competition from Intel. Advanced Micro Devices, Inc. (NASDAQ:AMD) is a global semiconductor company focused on high-performance computing, graphics, and visualization technologies. AMD operates four segments, including Data Center, Client, Gaming, and Embedded. While we acknowledge the potential of AMD to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AMD and that has 100x upside potential, check out our report about this cheapest AI stock. Read Next: and . Disclosure. None. Sign in to access your portfolio
Yahoo
17-05-2025
- Business
- Yahoo
1 Semiconductor Stock That Could Be a Surprise AI Winner
AMD's EPYC processors are increasingly used by cloud providers and Fortune 2000 enterprises. The chipmaker is building next-generation products to support AI models right out of the box. Elsewhere in AMD's business, its gaming and PC chips are also seeing strong demand. 10 stocks we like better than Advanced Micro Devices › Advanced Micro Devices (NASDAQ: AMD) is gradually evolving from mostly a traditional chip company to a prominent artificial intelligence (AI) infrastructure player. While Wall Street has been mostly focusing on Nvidia, AMD has quietly established itself as a strong player in the AI data center business. The company provides high-performance computing hardware and software solutions to clients for processing cloud and AI workloads. In the first quarter of 2025, data center revenue grew 57% year over year to $3.67 billion, making up almost half of AMD's total revenue. Data center AI business revenue also increased by a double-digit percentage year over year, driven by increased shipments of the MI325X accelerators for new cloud and enterprise workloads. With AI inferencing costs escalating rapidly, AMD is in a better position to capture a bigger share of the AI market. Its Instinct GPUs are known to offer superior price performance than competitors. Here are some more reasons why the company may prove to be a surprise AI winner in 2025. AMD's data center business is experiencing robust momentum, driven by solid demand for its EPYC server processors and Instinct AI accelerators. AMD accounted for 25.1% share of the server CPU market, up 2 percentage points year over year, as EPYC server processors continue to be in high demand from both cloud players and enterprise customers. All major cloud players are engaging with the company in the development of fifth-generation EPYC CPUs, codenamed "Turin." EPYC processors are also in high demand from enterprise customers across a range of industries and functions. The company expects enterprise adoption of EPYC processors to further accelerate, as more than 150 server platforms using these chips will become broadly available in the coming quarters. The company's data center AI business is also gaining traction. Multiple Tier 1 cloud and enterprise customers have opted for AMD's Instinct AI accelerators in the first quarter. These clients include one of the largest frontier model developers, which has deployed Instinct GPUs to cater to a significant portion of its daily AI inferencing workloads. AMD has also started sampling the next-generation MI350 series GPUs with several customers and is on track for production by mid-2025. With MI350 offering higher performance, memory capacity, bandwidth, support for new data types, and network efficiency as compared to the MI300 series, AMD expects strong deployment for these chips in the second half of 2025. Furthermore, the company is gearing up for the launch of MI400 series GPUs in 2026. AMD is also focusing on strengthening its software ecosystem, mainly its ROCm software stack for programming the company's GPUs. Instead of releasing quarterly ROCm updates, the company is now delivering them on a biweekly basis. The company has also increased access to its Instinct compute infrastructure for open-source developers to build, test, and deploy updates to the ROCm stack on a nightly basis. Subsequently, 2 million models on the open-source Hugging Face platform are running directly on AMD hardware without needing any special customization. The company is also ensuring that newly released AI models can run without hiccups on Instinct accelerators immediately after launch. Finally, the recent acquisition of ZT Systems is enabling AMD to sell fully integrated AI systems, instead of just hardware components. All these AI initiatives can dramatically expand AMD's data center business in the coming years. AMD's client segment also reported a strong 68% year-over-year revenue jump to $2.3 billion in the first quarter. The company experienced record client CPU average selling prices (ASPs), driven by increased demand for its high-end desktop and Ryzen processors in gaming and commercial segments. While AMD's processors are increasingly adopted in gaming desktops, the company is also seeing rising demand in the mobile computing market. Furthermore, sales of the company's latest-generation AI-capable processors also grew more than 50% quarter over quarter in the first quarter. AMD is also making its presence felt in the commercial PC space, with the company closing deals with large enterprises across several industries. Despite the solid tailwinds, AMD's shares are currently trading at 21.7 times forward earnings, significantly lower than Nvidia's forward P/E multiple of 25.4. While investors should not ignore the short-term revenue headwind arising from the export control restrictions for Instinct MI308 shipments to China, the fundamentals of the company are still strong. Hence, with a diversified product portfolio spanning various segments such as data center, gaming, and client; a robust balance sheet with $7.3 billion in cash; and a reasonable valuation position, AMD appears an attractive pick now. Before you buy stock in Advanced Micro Devices, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Advanced Micro Devices wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $620,719!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $829,511!* Now, it's worth noting Stock Advisor's total average return is 959% — a market-crushing outperformance compared to 170% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Manali Pradhan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy. 1 Semiconductor Stock That Could Be a Surprise AI Winner was originally published by The Motley Fool
