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AMD and Intel make the processors that act as the principle computing brains for private computer systems.
Dream time
Superior Micro Gadgets may have a number of bumpy quarters, however there is a long-standing motive to be optimistic concerning the inventory: the potential for its AI chips.
AMD
(Inventory ticker: AMD) reviews its outcomes for the second quarter after the shut of buying and selling on Tuesday.
Susquehanna analyst Christopher Rowland tells AMD buyers to worth the chipmaker’s long-term alternatives in AI chips, whilst he warns of near-term “headwinds.”
Wall Road estimates that AMD will report income of $5.3 billion with adjusted earnings per share of 57 cents for the June quarter. Analyst estimates for the present quarter are income of $5.8 billion and earnings per share of 73 cents.
On Monday, Rolland reaffirmed his constructive evaluation of AMD inventory, however lowered his share value goal to $135 from $145.
“AMD faces numerous near-term headwinds and elevated knowledge heart (DC) expectations, placing Wall’s scores in danger,” he wrote. “Nonetheless, we just like the long-term server incomes and MI300 (subsequent AI chip) alternatives.”
AMD and Intel use the x86 chip structure in making processors that act as the principle computing brains for computer systems and servers.
The analyst pointed to Intel’s muted outlook for its knowledge heart enterprise for the September quarter, citing stock points, a lackluster restoration in China and weak company demand. AMD’s gaming console section can be anticipated to decelerate later this yr.
He wrote, “We word the dangers to 2H Information (Second Half) because the bar is ready excessive, and the checks level to one thing lower than excellent.”
However Rolland nonetheless believes shareholders ought to concentrate on AMD’s prospects within the AI semiconductor enterprise, which started with the launch of the MI300 close to the top of this yr.
MI300 is AMD’s upcoming knowledge heart GPU. It is going to be appropriate for synthetic intelligence initiatives and is scheduled to be launched later this yr.
Write to Tae Kim at tae.kim@barrons.com
