AMD - Why the difference with NVIDIA?
$Advanced Micro Devices(AMD.US$ released its latest Q1'23 results.
Share prices went down after that.
Compared to its arch rivals $NVIDIA(NVDA.US$which seem to be enjoying more prospects, why has this other GPU maker shared a different fate?
1. Client segment is a major drag
AMD's strength lies in having chips embedded in various consumer electronics.
During the WFH boom, AMD rode on the catalyst.
But as chip supply is deemed surplus now, a glimpse of $Taiwan Semiconductor(TSM.US$ results would have offered some key clues of AMD's Q1'23 performances.
The Client segment made up 36% of Q1'22's revenue. So any hiccups would be as detrimental as what we have observed.
2. Shrinking gross margins
Gross margins also took a hit if we looked at the recent quarters.
Undoubtedly the shrinking gross margin stopped at 42% in Q3'22 and starts to stabilize, but YoY wise it is still down by 4 percentage points.
A shrinking revenue and gross margin is indeed a double whammy.
3. Lacking the AI magic powder
Now it isn't true to say that AMD chips are not used for AI. In its Embedded business segment, there are some AMD chips used in Subaru vehicles.
But when it comes to higher-end AI-related prospects, AMD seems to be firing blanks at the moment.
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The information available in this article/report/analysis is for sharing and education purposes only. This is neither a recommendation to purchase or sell any of the shares, securities, or other instruments mentioned; nor can it be treated as professional advice to buy, sell or take a position in any shares, securities, or other instruments. If you need specific investment advice, please consult the relevant professional investment advice and/or for study or research only.
The information available in this article/report/analysis is for sharing and education purposes only. This is neither a recommendation to purchase or sell any of the shares, securities, or other instruments mentioned; nor can it be treated as professional advice to buy, sell or take a position in any shares, securities, or other instruments. If you need specific investment advice, please consult the relevant professional investment advice and/or for study or research only.
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