AMD: Markets Underestimate The Potential For TAM Penetration/Expansion


  • AMD is projected to gain market share from Nvidia in 2024 and has strong growth potential in the AI chip market, at least until FY26.
  • Maturity and evolution of ML models expected from this year onwards will aid in TAM penetration. Advanced Micro Devices now expects $4 billion from the sales of MI300 series AI chips alone.
  • AMD’s product roadmap in Computex 2024 and the switch to annual release cycles to put AMD in a better position to compete with Nvidia.
  • The company’s stock is a bargain given its project revenue ramp and its 43x forward PE.

AMD Ryzen 3700X CPU in technician fingers, above a motherboard, part of a custom PC build.

k5hu/iStock Editorial via Getty Images

Investment Thesis

Advanced Micro Devices, Inc. (NASDAQ:AMD) has been lagging the overall semiconductor complex of stocks so far in 2024, performing in line with the broader markets and delivering a ~14%, marginally higher than the 12% YTD performance

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in AMD over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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