Bernstein Affirms Outperform on AMD, $650 Price Target

Bernstein SocGen Group analyst Stacy Rasgon reiterated an Outperform rating and $650 price target on AMD (NASDAQ: AMD).

“AMD’s Q3 results were good($13.4B/$2.09 vs Street $13.1B/$1.97), with Datacenter and Gaming above expectations, Embedded slightly above and Client slightly below.

Within Datacenter, both server CPUs and GPUs continue to show strength; within Client, AMD (unsurprisingly) noted PC sell through slowing late in the quarter given memory dynamics.

Q4 revenue outlook was strong even as client shortfalls build ($17.0B/~$2.92 vs Street $16.3B/$2.67), The beat is primarily driven by Datacenter, seen up >50% sequentially, probably to ~$12.8B vs.

Street at ~$11.5B.

Management expects strong server CPUs growth (seen up >20% QoQ) with AI GPUs implied >90% or so QoQ, crossing over server in the quarter and probably reaching ~$7B or so (above the street at ~$6.2B).

Client is however seen well below, guided down >20% QoQ and similar to Intel (~$2.36B or so, vs Street at ~ $3.0B, but unsurprising at this point).

AMD is certainly weathering the PC slump better than their larger competitor, though frankly this should not be all that shocking as client is simply a smaller piece of their puzzle, and in the meantime they have many more levers in the datacenter space to pull, along with much better execution.

To that end, they see overall sales growth exceeding 80% in 2027, with servers doubling and with datacenter representing over 80% of company revenues, suggesting datacenter sales of ~$80B and GPUs at least into the low to mid $40s billion (the latter almost tripling YoY as Helios ramps).

The company believes they have secured supply to hit these numbers, and that demand remains above supply; any additional supply they can manage to secure would thus represent upside.”

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