Susquehanna analyst Christopher Rolland reiterated a Positive rating on Advanced Micro Devices, Inc (NASDAQ: AMD) and raised his price target from $170 to $210.
All the focus is on MI300, with less investor focus on the quarter and guide, which the analyst noted as misses.
Expectations are high for an update on M1300 guidance, the analyst flagged, focusing doubts over the chip designer's chances of accomplishing the targets.
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Rolland expects generally in-line results and slightly disappointing first-quarter guidance.
He noted the most important swing factor for investors is the narrative and update for M1300.
For the Data Center, the analyst expects improving M1300 revenue, which could even eke out some sequential growth and a bit of upside into the first quarter.
The full-year revenue needs a minimum boost from over $2 billion to above $3 billion.
On average, investors Rolland spoke with are targeting closer to $6 billion, with some suggesting even higher.
The analyst noted that the stock reflects much of this M1300 upside. Offsetting MI300, Rolland stated that the server may soften the Data Center guide for the first quarter as checks point to a slower Genoa ramp, GPU crowding out CPU spend, and still more inventory to work down.
Intel Corp (NASDAQ: INTC) expects server to grow through 2024 given a reversion to historical growth rates, perhaps a positive sign for AMD CPU as per the analyst.
For the Client, ODM builds and sell-through have been disappointing into the end of the year, perhaps as the market is awaiting both Zen 5 and Meteor Lake.
While Intel sees a decline in first-quarter PC, they expect strong growth given the Al PC story, higher ASPs, and low-single-digit PC TAM growth. The analyst writes that revenue from Al PCs is a long-term growth story, unlikely to move the needle until at least 2H24.
For Embedded, Rolland noted that Intel expects the PSG inventory burn to last through the first half of 2024, a dynamic he said AMD is also seeing.
Xilinx lead-times (LTs) remain low, but declines have slowed, and LTs were flattish sequentially, perhaps a signal the FPGA market is bottoming, as per Rolland.
For Gaming, Rolland noted better console sell-through data and a mixed landscape for graphics cards.
Beyond the top line, the analyst expects gross margins to be in line but see some upside into 2024 as MI300 ramps with higher than corporate average margins.
In short, the analyst expects guidance may modestly disappoint, but the most crucial piece for investors on this print is the M1300 update, as investors wait to judge the upside for AMD in Al.
Despite high expectations, Rolland is bullish on MI300 overall and would use post-print weakness to add.
Price Actions: AMD shares traded lower by 0.07% at $177.12 on the last check Monday.