Advanced Micro Reiterates 60% Revenue Growth Led by Server Strength and Xilinx; FVE Remains $130

Advanced Micro Devices, or AMD, reported its 11th consecutive quarter of double-digit revenue growth primarily due to robust server sales and inclusion of recently acquired Xilinx. We are most impressed with the firm's execution on its product roadmap, particularly with its EPYC server CPU family that continues to gain share at Intel's expense. Management reiterated its prior full-year guidance for top-line growth of 60%, which includes Xilinx as well as continued share gains across its PC and server CPU products. Despite the strong results, shares fell 7% after-hours. We think the market was expecting an increase in management’s full-year revenue guidance based on Intel’s weaker-than-expected second-quarter results and guidance. Shares of narrow-moat AMD trade at an attractive discount relative to our unchanged $130 fair value estimate.