Street View: AMD's upbeat AI outlook overshadowed by supply and execution worries
AMD•AMD's AI outlook lifts forecasts but shares fall
AMD forecast third-quarter revenue above Wall Street estimates on Tuesday, banking on strong demand for its chips from massive data-center capacity expansions to power AI technologies.
Shares were down 7.4% to $480.4 in premarket trading.
Analysts flag Helios ramp, supply and execution risks
** J.P. Morgan (neutral, PT: $550) says AMD's Helios/MI450 shipments carry "meaningful execution risk" as it could weigh on gross margins with volumes increasing over the upcoming quarters.
** RBC Capital Markets (sector perform, PT: $540) sees component supply, data-center readiness and competition as potential challenges and awaits Helios volume increase to turn constructive on AMD.
** Morgan Stanley (equal-weight, PT: $465) says despite AMD's strong server revenue forecast, supply constraints limit near-term growth, hindering its long-term durability.
** Bernstein (outperform, PT: $650) says expectations from AMD remain high; however, AI demand supporting both a CPU and GPU story can drive growth.
"Despite some apparent surface tension, a sell-off into transition quarter right before both server and AI take off seems buyable to us," Bernstein says.
