AMD Stocks Rise as CFO Highlights Server Market Growth in Presentation
AMD's (NASDAQ:AMD) stock saw a slight increase of about 1% following CFO Jean Hu's optimistic presentation at Barclays' 22nd Annual Global Technology Conference. Hu highlighted the company's significant market share gains in the server CPU market; this share reached 34% last quarter, up from the low single digits a few years ago. This growth has been attributed to AMD's consistent focus on product innovation and application across all generations, from the first-generation Naples to the current fourth-generation family Genoa and the upcoming Zen 5 (known as Turin family products).
Hu also emphasized AMD's success in the PC market, achieving a market share of 27% in desktop computers and 19% in mobile devices during the third quarter. The company's ability to work closely with customers and provide technological leadership was identified as a key factor in this progress.
Despite these positive developments, Hu acknowledged that AMD is still not sufficiently represented in the enterprise server market compared to its presence in the cloud market. He summarized various market entry strategies, noting the importance of convincing every CIO about AMD's total cost of ownership (TCO) advantages. Efforts to increase field application engineers (FAEs) have led to double-digit growth in enterprise business over the last five quarters, and with the Turin product launching in the fourth quarter, AMD expects to maintain momentum into next year.
Hu also addressed competition, stating that he assumes competitors will perform well while AMD focuses on maintaining its competitive edge and leadership. He mentioned that the transition to ARM-based PCs has not significantly impacted AMD, as customers are more concerned with performance and efficiency, areas in which AMD has strong offerings.
Regarding the data center GPU market, Hu celebrated zero-based growth with expected revenues of $5 billion in 2024 and discussed a strong product lineup for 2025. The acquisition of ZT Systems is part of AMD's strategy to tackle system-level solutions and software investments, aiming to capture a significant portion of the AI infrastructure market.
In the embedded business, Hu reported that a bottom was reached in Q3, stability was achieved in Q4, and a gradual recovery is expected in 2025. He also mentioned focusing on mid- and high-end FPGA solutions across various sectors and various design wins.
Hu concluded his presentation by discussing AMD's business model, stating that aggressive R&D investment will continue to support multi-generational roadmaps and leadership, with opex growth expected to be less than revenue growth in order to leverage operational efficiency.