After reading this next platform article https://www.nextplatform.com/2024/10/30/amd-will-need-another-decade-to-try-to-pass-nvidia/, and looking at the charts of the GPU sales,  I decided to create a chart looking into the future.  I used the past numbers from the next platform and did a simple formula (SWAG) to calculate the next two years of revenue for both the GPU and CPU.  I realize this is just a guess but it is an interesting thought experiment. 

The formula adds the previous quarters sales with the previous quarters increase in sales and it adds an estimated acceleration number.  If the acceleration number is 0, you would have a straight line.  So, the larger the number the faster the line curves upward.  Obviously, a larger number would be better.  I chose an acceleration number of 100 for the GPU sales and 50 for the CPU sales.  For example: since last quarter's GPU increase was around 500 million, the next quarter's increase would be 600 million (500 + 100 acceleration number) which would put the next quarter's sales around 2.1 billion for GPU. That is 1.5 billion last quarter plus the 600 million. Each quarter just repeats to produce the chart below through 2026.

https://preview.redd.it/bmshxh53yjyd1.png?width=1478&format=png&auto=webp&s=4a3e7d5520c541bbfcd81b5a750c45d3da48ecf2

Here is the chart with a straight-line increase. The acceleration number is 0 for both GPU and CPU sales.

https://preview.redd.it/8jdytmy6yjyd1.png?width=1478&format=png&auto=webp&s=1410c08e9d2253f7d770843c13c8f22e420aa42f

Even with a straight-line increase in sales the numbers look pretty good.  The question is:  can AMD maintain this rate of increase and possibly accelerate it or will it peter out.  Assuming the economy does not tank I think AMD will do somewhere between the straight line and the accelerated curved line.  Hope it is closer to the accelerated line.

My model goes out until 2030 but I don’t think the acceleration will be sustained for more than two years so I added a deceleration estimate that started in Q1 2027.  The values I chose were 150 for GPU and 75 for CPU.  Here is the same acceleration as the first chart above expanded to 2030.

https://preview.redd.it/31spoiw9yjyd1.png?width=2090&format=png&auto=webp&s=78779fff75fb1c3caaaedfd63cd17fb27890e267

I realize this is pretty much a guess, but what I have learned is that if AMD can sustain the current growth with a little increase the numbers get very large over time.  I think the market and I forget that it takes a while to ramp semiconductor manufacturing and MI300 is the most complex chip ever manufactured at scale. My hope is that the constraint is on capacity and this growth will continue.  Both Lisa’s and Jensen’s comments would indicate that the demand is there and they expect it to continue.   

Where do you think AMD’s Datacenter GPU & CPU sales will be in two years and six years?

Give me a reason why I should NOT invest in AMD.

I'm back again with another post earnings price target list. The list will be updated throughout the day as new price targets get released. Please share any new ratings or missing info and I'll add them. You can check out the previous thread here. Thank you.

Apologies for the delay in creating the thread, was a little too busy this time around. I'm also struggling to find PT's this time, so any help would be nice.

Catching a falling knife

Wellllllllp they say its impossible to catch a falling knife and unfortunately thats where AMD is at this moment. We are getting a little relief today in tech but I'm not sure the bloodbath is over. At least not for us. If you look at our chart we are really in a no man's land as far as support goes and we haven't yet bottomed out from an RSI perspective either.

AMZN reported some really solid earnings and I think that NVDA is going to probably have a great earnings. I bought a little yesterday and will buy more on weakness and I feel like thats what I've got to do with AMD as well. I can't justify buying here bc I think everything is going to go down further but I also can't like just expect perfection and AMD to bounce right off of $135. So I'm going to start nibbling in blocks of 10 shares at $142 on the way down at some key levels. It just makes sense. We will go back up. It's just going to be a minute. But DCA-ing into a position for a swing trade really is the only play we've got right now. Sure you can do the whole buy and hold strategy but the truth is that you are giving up soooo much better gains in pretty much anything else in the market.

I gotta say at the moment AMD is not a great investment vehicle. It is a great trading vehicle but not an investment vehicle if you are new to the party. If you are already here then you're in it and I believe in the future but my long term hold shares have like a $40 cost basis so whatever I'm fine with it. But I really could not make a case for adding anything to my long term position at the moment bc the return just isn't great ya know? But trade this thing away on the swings for sure. That means buying AND SELLING which I know is sacrilegious to some people in this sub but its the truth for right now.

The partnership is not going to move the SP needle by itself, but it's another straw added on to the growing pile on Nvidias back.

Just me thinking outloud, instead of intending to be financial advice.

Based on quotes from the last earnings calls and AMD's IR (see links and quotes at the end), I see at least $3.5B EPS for GAAP and $5B Non-GAAP in 2025.

First, what does the DC GPU guide look like: it looks like 0.5B a quarter growth for all of 2024. Quote D places Q2 at 1B. Quote A places Q3 above 1.5B. Quote B says "exceed $5 billion in 2024". The smoothest ramp on that is 0.5B on Q1 and 2B on Q4. This lines up with Quote C on Earnings expectations for all segments in Q4 2024.

Second, what does Q4 Earnings look like, from an EPS perspective? Quote E has a table of Q3. Quote C is outlook. Based on those, I'm extrapolating Q4 Non-GAAP based on 7.5B in Revenue of 4022M Gross Profit, 1900M Operating Income, a Net Income of 1875M, and therefore a Non-GAAP Diluted EPS in Q4 of $1.15. Based on flat/fixed costs in "RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES" from the link in Quote E, GAAP would be 3789 Gross Profit, 2803 Operating Expenses, $909 Operating Income, 1183 Net Income, and therefore a GAAP Diluted EPS in Q4 of $0.72.

This would mean an estimated 2024 Non-GAAP EPS of $1.44, and a 2024 GAAP EPS of $3.38. At a Price of $144, that would a non-GAAP P/E of 100, and a GAAP P/E of 42.6.

Third, what does 2025 look like? Separating DC into GPU (ramp in first part), leaves a DC non-GPU of $1837M Q1, $1834M Q2, $2050M Q3, and an estimated $2200M Q4. This is baking in a conservate linear growth on DC AI and "only" $150M growth Q3 to Q4 to non-GPU DC to bring DC to $4.2B from $3.55. Also, assuming 2B Q4 Client, $400M Gaming, and $850M Embedded. Putting DC GPU on a conservate boring glide of $500M quarter over quarter growth, would put this at 2.5B Q1 25, 3B Q2 25, 3.5B Q3 25, and 4B 25. Putting DC non-GPU on a glide of $150M quarter over quarter growth, would put this at 2.35B Q1 25, 2.5 Q2 25, 2.65 Q3 25, and 2.8 Q4 25. This is speculation, but DC jumped from 1.16 in 21Q4 to 1.6B in 22Q4 to 2.3B in 23Q4. For my further estimates, I'll freeze the other seqments at 3.3B, even though Gaming is under $0.5B, Embedded is poised to recover, and Client is projected to grow handily.

That would put Revenue at 8.15B Q1 25, 8.8B Q2 25, 9.45B Q3 25, and 10.1B in Q4 25. Assuming matching growth to EPS compared to Revenue would put this at GAAP EPS .78 Q1 25, .84 Q2 25, .91 Q3 EPS, and .97 Q4 25, or $3.5 for all of 2025. At a Price of $144, that would be a forward GAAP P/E of ~41. That would put a non-GAAP EPS of $1.25 Q1 25, $1.35 Q2 25, $1.45 Q3 25, and 1.55 Q4 25, or 5.6 for all of 2025. At a price of $144, that would be a forward Non-GAAP P/E of ~26.

Sanity checking the numbers, this would put DC non-GPU at a growth of 27% YoY, and all seqments collectively at a growth of 35% YoY.

Even though my estimated Revenue is going from 25.6B in 24, to 36.5B in 25, EPS is going from $1.44 estimated 2024 GAAP (or 1.13 for the last 4 reported quarters) to $3.5 2025, primarily due to dropping off .08 for Q1 24, and .16 for Q2 24.

I still expect AMD's share price to be drifting in the wind for the next 6 months, until the .08 and .16 quarters drop off the radar, to be replaced by quarterly numbers 5x-10x larger.

This also assumes no growth in (Client, Gaming and Embedded) collectively, which I believe will grow, it is just harder to model. This also assumes only borin linear growth to DC GPU, when... it should be quadratic/exponential.

If AMD is indeed growing 35% in 2025 on top of record quarter Q3 24 and record quarter Q4 2024, a forward Non-GAAP P/E of ~26 seems very low.

---

Q3 Earnings call

From https://www.fool.com/earnings/call-transcripts/2024/10/29/advanced-micro-devices-amd-q3-2024-earnings-call-t/

(A)

Timothy Arcuri -- Analyst

I had a quick one and then a more intensive question. So the first one is I wanted to ask about the September actuals for Data Center GPU. It seems like it was in the $1.5 billion range. And that would put December in kind of the $2 billion range.

Is that about right?

Lisa T. Su -- President and Chief Executive Officer

So it's a pretty granular question, Timothy. But maybe let me help you with this. We actually did better in the Data Center GPU business relative to our initial expectations. So you would imagine that the business was actually greater than $1.5 billion.

I mean we're actually seeing now our GPU business really approaching the scale of our CPU business.

---

(B)

Lisa T. Su -- President and Chief Executive Officer

We have built significant momentum across our data center AI business with deployments increasing across an expanding set of cloud, enterprise, and AI customers. As a result, we now expect Data Center GPU revenue to exceed $5 billion in 2024, up from $4.5 billion we guided in July and our expectation of $2 billion when we started the year.

---

(C)

Jean Hu -- Executive Vice President, Chief Financial Officer

Now turning to our fourth quarter of 2024 outlook. We expect revenue to be approximately $7.5 billion, plus or minus $300 million, up 22% year-over-year, driven by strong growth in our Data Center and Client segment, more than offset decline in the Gaming and Embedded segments. We expect revenue to be up approximately 10% sequentially, driven primarily by growth across Data Center, Client, and the Gaming segment.

In addition, we expect fourth quarter non-GAAP gross margin to be approximately 54%. Non-GAAP operating expenses to be approximately $2.05 billion.

---

(D)

Q2 Earnings call:

https://seekingalpha.com/article/4708251-advanced-micro-devices-inc-amd-q2-2024-earnings-call-transcript?source=generic\_rss

Turning to our data center AI business, we delivered our third straight quarter of record data center GPU revenue with MI300 quarterly revenue exceeding $1 billion for the first time.

---

(E)

https://ir.amd.com/news-events/press-releases/detail/1224/amd-reports-third-quarter-2024-financial-results

"Non-GAAP(*) Quarterly Financial Results

Q3 2024 Q3 2023 Y/Y Q2 2024 Q/Q

Revenue ($M) $6,819 $5,800 Up 18% $5,835 Up 17%

Gross profit ($M) $3,657 $2,963 Up 23% $3,101 Up 18%

Gross margin 54% 51% Up 3 ppts 53% Up 1 ppt

Operating expenses ($M) $1,956 $1,697 Up 15% $1,847 Up 6%

Operating income ($M) $1,715 $1,276 Up 34% $1,264 Up 36%

Operating margin 25% 22% Up 3 ppts 22% Up 3 ppts

Net income ($M) $1,504 $1,135 Up 33% $1,126 Up 34%

Diluted earnings per share $0.92 $0.70 Up 31% $0.69 Up 33%"

Intel Q3 2024 earnings page

• https://www.intc.com/news-events/ir-calendar/detail/20241031-q3-2024-intel-corporation-earnings-conference-call

Earnings release

• https://www.intc.com/news-events/press-releases/detail/1716/intel-reports-third-quarter-2024-financial-results

Slides

• https://d1io3yog0oux5.cloudfront.net/_871cf2055f752fbdc1592e62df95c4d3/intel/db/887/9085/earnings_presentation/Q3+2024+Earnings+Deck+INTC.com.pdf

Earnings call / webcast

• https://edge.media-server.com/mmc/p/2t7garfa/

Transcript

• https://www.fool.com/earnings/call-transcripts/2024/10/31/intel-intc-q3-2024-earnings-call-transcript/

Previous discussions

• 2024-Q2
• 2024-Q1
• 2023-Q4
• 2023-Q3
• 2023-Q2
• 2023-Q1
• 2022-Q4
• 2022-Q3
• 2022-Q2
• 2022-Q1

Welp now

Yesterday was probably the most active discussions we've had in a while. Not our usual sleepy little corner of the internet. I thought some of the points that were raised and some of the debates were fascinating and that to me is the value of this group. So many different people actually having real thoughtful discussion about details like EPS calculation----to sales figures-----to wafer production------to client strategy vs DC. It was just great! So well done everyone. If you showed up yesterday I urge you to stick around and lets talk things out! Even if I don't agree with your thesis I still like reading it bc it makes me think. And sometimes I revise my own thesis when you point out your own ideas. So thank you!

On to the show:

AMD welp the bloodbath was probably a lot worse than what I was expecting mainly bc of SMCI which just apparently is a fraud. And part of me wonders about the "promise" of AI is more smoke and mirrors than actual applications. I still see a lot of stuff "trending" in the right direction for 2026 and maybe beyond but it aint there yet. And still with little to no legislation out there, is some group like the FTC or the CFPB or some new unnamed alphabet soup gov't group going to come in and regulate this thing to death (looking at you Democrats). Supermicro is just fascinating bc of how crazy their ride up was and now it looks like they are the emperor wearing no clothes except for them its no real sales. Its a cautionary tale of not reporting "bookings" as sales which has been something that Lisa has done constantly that (I will admit) I have criticized her before. She doesn't report sales until the money had hit their account on a POD status. And it drives me insane. But this perfectly shows why she makes the big bucks and why she does it this way. I'm sure there is probably some place in between for both of them but alas I would always rather be more conservative than not so mehhhhh I'll shut up. Mama Su is right as always lol.

AMD dropped hard and we are back in the mode where "Good News = Bad News" as far as the 10 yr is concerned bc its starting to look like the Fed might have gone a little hard in the paint and there is no chance of further rate cuts for the moment. Growth stocks and tech stocks are the most sensitive to the 10 yr so the blood bath could continue here with strong job numbers and PCE not coming in light.

AMD gapped down and before everyone freaks out------SAY IT WITH ME------Gaps almost always fill. So it will fill back in in the future, just might be a hot minute. Interesting detail that I failed to note until today. Our pre-earnings rally went right up against my trendline that I had and that former trendline was the resistance that killed our pre-earnings rally. We probably needed more than a couple days of rally to push through. The fact that we were failing that day was probably our first sign of weakness that the market didn't think AMD could go farther and was stretching its valuations to its limit but still you always hope for an earnings surprise. We just didn't get it.

We collapsed yesterday below our 200 day which I think was a given but we even cut like butter through my initial interest point of $150 as well. And when you look at the RSI we still have a LONG LONG way to go. This $148 was the next near term support level and we don't really have anything else below us except $135. As scary as this sounds, I'm not sure that the selling is stopped. Could be going down even more before we bottom out. I will be nibbling here and there on the way down for sure.