AMD's A.I. Component Hasn't Been Recognized Yet, Earnings Reaction
top line. I’m not sure the trailing is what’s going to be important here, though, to George Tillis, joining us from Salt Lake to break down the number I’m looking for guidance here, George. I mean, did they say anything along the lines of what in video did last quarter, which moved this stock an incredible amount as well. 10% on videos earnings last quarter. So I think there’s going to be a different situation for a and e And the reason I say this O J is that a M D is not expected to release their AI driven
GP or graphics processing. Chips until Q four. So guidance is going to be around Q four, probably in Q one of next year. I think this is what everyone’s waiting for, but Based upon the trailing numbers, they actually beat the estimates, both on top line as well as bottom line earnings. But if you look at the bar, the bar was sweat sick quite well. And so let’s just take a look at the figures first, but it looks like The earnings came in around 58 cents on adjusted basis, and that beat the 57 estimate. But you
have to consider that still about 45% down relative to last year, $2.05 and cells, which beat the estimates at 5.5 0.36 billion. Forgive me We’re still down about 18%
the video, and that’s why I think the video has Been on a rocket ship ride when it comes to the sales, especially for the quarter. They’re going to be reporting coming up. But a M D. I suggest alongside the video is really developing a duopoly in the AI based discrete graphics chips, and I think that’s a huge catalyst for a and B not to mention You have to think about the industrial chips and, of course, manufacturing field programmable chips through Xilinx CPU chips, and I think server data center chip sales are probably improve going forward
because we know that there is a cyclical improvement when it comes to personal computing and server chips and, of course, demand for enterprise. Data going forward, But I think the AI component of Andy’s business really hasn’t been recognized, at least on a trailing basis yet and I think again, analysts are going to be Laser focused on the release of their review, AI driven chips and Q four as well as maybe some pre orders, which I’m sure analysts coming up in the conference call are going to be looking very carefully out, right? George I don’t know
how this stock stays up. Um without any big. Changing the bottom line expectations. I mean, it’s just, you know, like the got like I get that they beat on the trailing, but fine MB always beats. Everybody knows that they beat the heck out of Intel and The right there within video, but specifically for this So called AI Revolution. We’ve seen it. It’s been a revolution for videos, Bottom line, and so when videos rally causes such a huge rally for AMG, it feels like they have to give something commensurate. Is there anything here commensurate with the
guidance lift? The in video was forced to provide last quarter. Well I think at the end of the day you have to work at the market structure videos, not essentially going to have a monopoly and GPU tips. AMG has been there. They just happen to have technologies that haven’t Yeah, That’s the thing we are assuming here and I think that’s why based upon beating these numbers, you’re seeing a little bit of a lift to the upside. Everyone’s really looking at a I when it comes down and a and B look, I think at the end
of the day you’re not gonna have new video. Just take all the markets here. Eventually there’s going to be huge demand for a MDS chips. They just haven’t brought them to marketplace. To the same extent that Nigeria has and so nefarious, obviously leading the AM D. But there’s no other player out there on a relative basis, at least a US based semiconductor company that can compete alongside the video or at the very least compete against them, which is a and D that in other words, this is a duopoly that’s forming and I think eventually This
will manifest into very creative earnings for a M D. But if you look at a M d. It’s a very complete company. And what I mean by that is it’s got exposure. Obviously, two CPUs also data center server chips, but I think the system on a chip technologies and industrial chips are another area that AMG has a complete market in Relative to companies like the video. So if you add on to the GPU and the three D acceleration ships alongside the video, that’s a huge catalyst. I suggest for a and E may sound like I’m
a little bit biased, but I just see how this market is developing. New video is not winner Take all based business and I think I am D is going to have a tremendous opportunity for market share standpoint on the forward contingency. Okay? So We are basically trusting if we’re buying MD here. We’re basically trusting that they are going to do everything they have done in the past and as well with graphics data centers, all that compared to in video. Yeah And the thing about it is it’s not manifesting. Like I said up until about Q
four. So you probably won’t see the actual results to some A I B sales for AMG until at least Q one of next year. So therefore, with that said, You know, we may still be a little bit early for AMG to, of course manifest to hire based upon again the time of the year that we’re in But also again contingent upon the release of a successful chip that’s actually absorbed by the marketplace. So again, you know, I think this is a stock that’s trading really about on forward expectations. But there is an element to again
the low bar that has already been set and actually beat when it comes down to the trailing earnings themselves. I mean, just taking a look at this 18% decline in sales and 45% decline in earnings. The stock is trading higher in the after hours, so you have to consider the discount former mechanism of their business but also again the catalyst associated with secular trends in a I Alright, um, breaking down some of the divisions here, Um, data centers at 1.32 billion Just not even really in line with analysts 1.38 you know, like I don’t know,
man. It’s market might begin a little frothy George when you’ve got imperfection in these numbers, frankly, I mean the bottom line EPS by a cent beating and sales coming in a little bit ahead on the top line like I feel like that is the very least minimum should be a cause for this doctor rally. At this point, I would have expected either a big margin beats saying, Okay, we’re going to be even more profitable than we thought. And we don’t have that. We got margins down from a year ago, and there’s no big revision to
the outlook. Without a revision of the outlook. I mean, we may end up seeing this rally sort of fade out. Yeah That’s what I’m saying. The call is going to be hugely important. I think it starts at three PM central, so we’re still early for that call. But look at the end of the day, everyone’s gonna be looking forward on and not necessarily a pass and you can actually see You know, looking at the disparity between companies that are performing well with semiconductor space versus those that are not Servers, data centers and actual PCs. NAND
flash memory chips, All state drives Western Digital. All those companies, including Intel, and even a and B, I think has been languishing on a relative basis because of computing exposure. They’ve been underperforming the industrial chips, the Texas Instruments, the on summit conductors out there. Blaster has been a real big Um, movement if you will in terms of sales for software, but also graphic ships from in the video. I think that’s from a hardware standpoint alongside some of the industrial chip manufacturers. That’s why they performed relatively well, considering softness that we’ve seen a data center server
and of course, CPU chips. All right, so I thought a little bit of a nugget of an outlook, but it’s not much just to close it on when they say that the data in client groups are going to grow by double digits. Going forward . That is a little bit of a tick up from the high single digits. They just did, where data grown by about 9% or so we gotta jump Georgia out
