20231102-招银国际-Implications_of_AMD_3Q23__PC_recovery,_smooth_ramp-up_of_MI300_Series_and_AI_PC_opportunities_5页_794kb

AMD 3Q23 Financial Performance Summary

• Q3 Revenue: US$5.8bn, representing a 4% year-over-year increase and an 8% quarter-over-quarter increase, driven by record server CPU sales and strong Ryzen processor demand. Earnings Per Share (EPS) was US$0.7, up 4% year-over-year from US$0.67.

• Gross Profit Margin (GPM): Improved to 51% year-over-year, primarily due to robust client segment performance and better product mix.

• Segment Analysis:

  • Client Segment: Revenue surged 42% year-over-year and 46% quarter-over-quarter to US$1.5bn, attributed to normalized PC inventory levels, seasonal demand patterns, and strong sales of the Ryzen 7000 Series. QoQ growth boosted by commercial workstations and AI PC initiatives.
  • Data Center Segment: Revenue remained flat year-over-year but increased 21% quarter-over-quarter to US$1.6bn, fueled by high demand for 4th gen EPYC processors from cloud and enterprise customers.
  • Gaming Segment: Revenue declined 8% year-over-year and 5% quarter-over-quarter to US$1.5bn, impacted by soft demand and inventory corrections, though partially offset by strong Radeon GPU sales.
  • Embedded Segment: Slight year-over-year decline of 5% to US$1.3bn, with steady but declining quarter-over-quarter performance due to end-market inventory destocking.

• Q4 2023 Outlook:

  • Revenue guidance of US$6.1bn +/- US$300mn (up ~9% year-over-year, or 5% quarter-over-quarter) and GPM projected at ~51.5%.
  • Client and data center segments expected strong double-digit year-over-year growth, while gaming and embedded segments anticipated decline due to persistent weakness.
  • Data center GPU revenue target of ~US$400mn for Q4 2023 and >US$2bn for 2024, amid positive progress in MI300A/MI300X accelerator validations and shipments.

• Key Opportunities: Positive outlook on PC market recovery, server inventory destocking, AI PC platform launches in December, and AMD's leadership in AI-related chip advancements, benefiting supply chain players like Lenovo, Luxshare, and FII.

• Stock Recommendations: Maintain OUTPERFORM rating for AMD, with emphasis on PC/server supply chain stocks such as Lenovo (992 HK), FIT Hon Teng (6088 HK), Luxshare (002475 CH), FII (601138 CH), and others, as highlighted in the equity research.