4. Advanced Micro Devices, Inc. (NASDAQ:AMD)
Number of Hedge Fund Holders: 108
Cramer remarked that Advanced Micro Devices, Inc. (NASDAQ:AMD) performed well enough in its third quarter but not exceptionally well while highlighting the company’s difficulties with supply chain constraints.
“Now, we’re trying to buy it for my Charitable Trust. Last night, AMD reported an extraordinary quarter, numbers I could never have imagined a year ago, two years ago. Back then, I would’ve thought that making $2 billion in artificial intelligence chips would be incredible and now it looks like they’ll do $5 billion. But traders don’t care about the quarter, that’s now in the rearview mirror. Do they? They care about the next quarter and the next 12 months for that matter. And on that basis, AMD did well, but not well enough.
Management guided for good revenues and good, but not good enough earnings. When you’re a high-rolling AI company in the same league as… Nvidia, you need to deliver Nvidia-style blast-offs. CEO Lisa Su didn’t give us a blast off, it was fine, not special. Of course, the problem with the forecast is that AMD’s facing supply constraints, they literally can’t make enough chips to meet the demand. That’s a high-quality problem. And you know, the forecast was like, here and there. Think of this company as a B student that basically gave you an inline forecast right down the middle. That’s not enough. So the stock got us clock cleaned… The numbers were simply good, but not good enough given the expectations. So that’s why the stock dropped more than 10% to where I think we probably should be buying some for the Charitable Trust.”
Advanced Micro Devices (NASDAQ:AMD) is a prominent player in the semiconductor sector, recognized for its innovative processors and graphics solutions that cater to a wide range of applications, including personal computers and data centers. Competing with major companies like Intel and Nvidia, it operates through key business segments such as Client, Data Center, Gaming, and Embedded, with a strong emphasis on high-performance and adaptive computing technologies.
It should be noted that during the earnings call, Advanced Micro Devices (NASDAQ:AMD) CEO Lisa Su discussed the ongoing challenges in the supply chain environment, commenting that the company has effectively managed its capacity. She acknowledged that while supply tightness is expected to persist in the upcoming quarters, the company has outlined plans for significant growth heading into 2025.
For the fourth quarter, the company expects revenue to be around $7.5 billion, with a possible variance of $300 million, indicating a projected growth of 22% at the midpoint.
Additionally, the company has revised its full-year GPU data center revenue forecast from over $4.5 billion to now exceeding $5 billion. Looking toward 2025, the company remains optimistic about continued growth in the data center segment, driven by substantial investments from companies aiming to expand their infrastructure for AI workloads. The company also mentioned that customers are increasingly diversifying the workloads they run on its GPUs.
