AMD: The Dark Horse of Wall Street's Earnings Season
Wednesday, Jan 22, 2025 7:50 am ET
3min read 
As the earnings season unfolds, investors are keeping a close eye on tech giants and their financial performance. However, one company that might surprise Wall Street with better-than-expected earnings is Advanced Micro Devices (AMD). Here's why:
1. Expanding Data Center Portfolio: AMD's data center portfolio, which includes EPYC processors, Instinct GPUs for AI, and Pensando DPUs, has been a key growth driver. In the third quarter of 2024, AMD's data center revenue set new records, doubling compared to the third quarter of 2023, driven by strong Instinct AI accelerator and EPYC CPU sales (EE Times). This growth is expected to continue, contributing to AMD's overall earnings.
2. Strong Server Market Share: AMD's server market share grew to 24.2% in the third quarter of 2024, up from 23.3% compared to the third quarter of 2023. The company's server revenue share also rose to 33.9% from 31.2% in the same period (Mercury Research & Wccftech). This growth in the server market is likely to translate into improved earnings for AMD.
3. Growth in AI and Machine Learning: AMD's AI accelerator roadmap through 2026, including the upcoming MI350 and MI400 series, positions the company well in the growing AI and machine learning market (EE Times). As AI and machine learning continue to gain traction, AMD's earnings are expected to benefit from this growth.
4. Diverse Product Portfolio: AMD's diverse product portfolio, including Ryzen CPUs for desktops and laptops, and Radeon GPUs, caters to various market segments, driving sales and revenue growth (Wccftech). This diversification helps AMD maintain strong earnings even in the face of market fluctuations.
5. Historical Performance: AMD's historical performance demonstrates a consistent trend of market share gains and revenue growth. For instance, AMD's EPYC series entered the server processor market in 2018 with around 2% market share, growing to roughly 8% by 2020, and accelerating to 27% in 2022 (Wccftech). This track record suggests that AMD is well-positioned for better-than-expected earnings in the future.
In conclusion, AMD's expanding data center portfolio, strong server market share, growth in AI and machine learning, diverse product portfolio, and historical performance position the company to surprise Wall Street with better-than-expected earnings. As the earnings season progresses, investors should keep a close eye on AMD's financial performance and consider the company as a potential dark horse in the tech sector.
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