AMD Earnings: Maintaining $145 Valuation as AI GPU Sales Met Our Expectations

Narrow-moat Advanced Micro Devices reported solid first-quarter results and provided investors, in our view, with a decent second-quarter forecast. However, we suspect some investors were hoping for a higher forecast for AMD’s budding data center graphics processing unit business for artificial intelligence. Shares fell 8% afterhours and approached our unchanged fair value estimate of $145 per share. We anticipate that AMD will take a piece of the AI GPU pie. Its revenue coming from a brand-new business is quite impressive in absolute terms, but we don’t see many signs that AMD will reach parity with Nvidia in AI GPUs soon.