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ssenjoe
2021-08-04

Amd trend up

AMD Eats More Cake<blockquote>AMD吃更多蛋糕</blockquote>

Summary AMD had a great quarter, and the stock price was appropriately rewarded with a price surge.

AMD Eats More Cake<blockquote>AMD吃更多蛋糕</blockquote>

免责声明：上述内容仅代表发帖人个人观点，不构成本平台的任何投资建议。

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{"i18n":{"language":"zh_CN"},"data":{"magic":2,"id":807257844,"tweetId":"807257844","gmtCreate":1628040529588,"gmtModify":1633754144765,"author":{"id":4090754056039310,"idStr":"4090754056039310","authorId":4090754056039310,"authorIdStr":"4090754056039310","name":"ssenjoe","avatar":"https://static.laohu8.com/default-avatar.jpg","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":11,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":1,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"extraTitle":"","html":"<html><head></head><body>Amd trend up</body></html>","htmlText":"<html><head></head><body>Amd trend up</body></html>","text":"Amd trend up","highlighted":1,"essential":1,"paper":1,"likeSize":5,"commentSize":2,"repostSize":0,"favoriteSize":0,"link":"https://laohu8.com/post/807257844","repostId":1126440748,"repostType":4,"repost":{"id":"1126440748","kind":"news","pubTimestamp":1628040176,"share":"https://www.laohu8.com/m/news/1126440748?lang=zh_CN&edition=full","pubTime":"2021-08-04 09:22","market":"us","language":"en","title":"AMD Eats More Cake<blockquote>AMD吃更多蛋糕</blockquote>","url":"https://stock-news.laohu8.com/highlight/detail?id=1126440748","media":"seekingalpha","summary":"Summary\n\nAMD had a great quarter, and the stock price was appropriately rewarded with a price surge.","content":"Summary<blockquote>总结</blockquote> <ul> <li>AMD had a great quarter, and the stock price was appropriately rewarded with a price surge. The company is not as supply-constrained as the market thought it would be.</li> <li>Long-term investors should keep locked in on the bigger narrative. A $79B TAM that is not as outlandish, and a $30-$40 data center opportunity. AMD is still scratching the surface.</li> <li>Supply constraints may well continue to pose challenges. We should weigh the odds of middling growth against financials and valuations.</li> <li>At an NTM EV/S of 7.7x and NTM EV/EBITDA of 30.3x, multiples are reasonable despite the uncertain supply scenario.</li> <li>The Abstract Portfolio is long AMD.</li> </ul> <img src=\"https://static.tigerbbs.com/d13f5b67b0b560ab7300802990149668\" tg-width=\"1536\" tg-height=\"1024\" referrerpolicy=\"no-referrer\">Vlad Dmytrenko/iStock via Getty Images<blockquote><ul><li>AMD度过了一个出色的季度，股价也得到了价格飙升的适当回报。该公司并不像市场想象的那样受到供应限制。</li><li>长期投资者应该继续关注更大的故事。价值790亿美元的TAM并不奇怪，还有价值30-40美元的数据中心机会。AMD仍在触及表面。</li><li>供应限制很可能继续带来挑战。我们应该权衡适度增长与财务和估值的可能性。</li><li>NTM EV/S为7.7倍，NTM EV/EBITDA为30.3倍，尽管供应情况不确定，但倍数仍是合理的。</li><li>抽象投资组合是多头AMD。</li></ul>Vlad Dmytrenko/iStock来自Getty Images</blockquote> By \"cake\", I mean \"market share\".<blockquote>我说的“蛋糕”是指“市场份额”。</blockquote> In my view, AMD's (AMD) bull case scenario is simple: market share gains with sustained technology leadership for years to come.<blockquote>在我看来，AMD（AMD）的牛市情景很简单：未来几年凭借持续的技术领先地位获得市场份额。</blockquote> With the latest earnings results and seemingly big traction in the enterprise, data-centric, and server markets, the bull-case scenario is looking strong. I'd put the odds in AMD's favour to win going forward.<blockquote>随着最新的盈利结果以及企业、以数据为中心和服务器市场的巨大吸引力，牛市前景看起来很强劲。我认为AMD未来获胜的可能性很大。</blockquote> Not So Supply-Constrained Now<blockquote>现在供应不那么紧张了</blockquote> AMD's latest earnings results were stellar, beating on both revenue and earnings estimates. The company is firing on all cylinders. Check out these graphs with the latest Q2 results towards the right.<blockquote>AMD最新的盈利结果非常出色，收入和盈利都超出了预期。该公司正在全力以赴。看看这些图表，右边是最新的Q2结果。</blockquote> <img src=\"https://static.tigerbbs.com/98f0702e1e6822224147bd4b983c88ed\" tg-width=\"582\" tg-height=\"315\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> <img src=\"https://static.tigerbbs.com/dbb02619444f2ded968c971634ca8be9\" tg-width=\"573\" tg-height=\"316\" width=\"100%\" height=\"auto\">Source:Q2 2021 Quarterly Results<blockquote>资料来源：2021年第二季度季度业绩</blockquote> Over the past few quarters, we've seen substantial momentum in the fundamentals. Sales have accelerated (cake has been eaten), gross margins have expanded, and the company is comfortably free cash flow generative at a 23.1% margin in Q2. They can capture this kind of free cash flow because:<blockquote>在过去的几个季度中，我们看到了基本面的强劲势头。销售加速（蛋糕已经被吃掉），毛利率扩大，公司第二季度的自由现金流利润率为23.1%。他们可以获取这种自由现金流，因为：</blockquote> <ol> <li>They have the best in class products in the computing market for most of their target applications, which translates to pricing power and profit-taking ability.</li> <li>The world keeps wanting more computing power; the pandemic has accelerated demand and with AMD positioned with best in class products, it has benefitted from demand substantially outweighing supply.</li> </ol> The big concern heading into 2021 was the glass ceiling on sales growth for the semiconductor industry (and the fabless AMD) due to foundries like TSMC (TSM) and global running at max capacity with the ever-increasing demand across all computing applications. This Q2, AMD pleasantly surprised us by raising their FY2021 guidance to 60% YoY from the previous 50% YoY. The company has incrementally made progress in building up the supply every consecutive quarter and appears to be on track to close in late 2021 with higher growth rates. Lisa Su expects it to get easier in 2022.<blockquote><ol><li>对于大多数目标应用程序，他们拥有计算市场上同类最佳的产品，这转化为定价能力和获利能力。</li><li>世界一直想要更多的计算能力；疫情加速了需求，AMD凭借一流的产品定位，受益于需求大大超过供应。</li></ol>进入2021年，最大的担忧是半导体行业（以及无晶圆厂AMD）销售增长的玻璃天花板，这是由于台积电(TSM)等代工厂和global以最大产能运行以及所有计算应用需求不断增长。今年第二季度，AMD将2021财年同比增长指引从之前的50%上调至60%，令我们感到惊喜。该公司在连续每个季度增加供应方面都取得了逐步进展，似乎有望在2021年底以更高的增长率完成。Lisa Su预计2022年会变得更容易。</blockquote> And what I've said previously is, certainly, we do see some level of constraints, but we are making progress each quarter. And we made progress in the second quarter that enabled us to exceed the original guidance. And as we go into the second half of the year, we're continuing to bring on extra supply each quarter, which is leading to the full year guidance raise that we have. I think it improves in 2022. We've been planning for significant growth. Our model is one where we're going to drive significant growth. - CEO Lisa Su,Q2 Earnings Transcript The above statement is a reason to be optimistic. So the market rewarded AMD appropriately with a nice 2-3 day surge given the improved outlook. However, to properly contextualize whether AMD makes for a strong investment, it makes sense to look longer-term.<blockquote>我之前说过的是，当然，我们确实看到了一定程度的限制，但我们每个季度都在取得进展。我们在第二季度取得了进展，使我们能够超过最初的指导。随着我们进入下半年，我们每个季度都会继续增加供应，这导致我们的全年指导上调。我认为2022年会有所改善。我们一直在计划显着增长。我们的模式是我们将推动显着增长的模式。-首席执行官Lisa Su，第二季度收益记录上述说法是一个乐观的理由。因此，鉴于前景的改善，市场适当地奖励了AMD 2-3天的上涨。然而，为了正确理解AMD是否是一项强有力的投资，从长远来看是有意义的。</blockquote> How Big Is The Cake?<blockquote>蛋糕有多大？</blockquote> I don't think the market is fully factoring in the size of the opportunity at hand for AMD, shall it grow unhindered by supply constraints. Rewind back to 2019, and Intel (INTC) was recording $8-10B in sales per quarter for the data-centric market only. It was widely understood that Intel was the only name in town for the data centre and held most of the share back then. AMD's Q2 data centre revenue contributed to 20% of the $3.85B top-line, amounting to less than ~$1B. Theoretically, AMD can still be 5-8x in this market should it maintain its relatively obvious technological leadership going forward. While every growth business points towards an astronomic total addressable market relative to the current sales run-rate, I think it's worth taking AMD seriously on its targets.<blockquote>我认为市场没有充分考虑到AMD面临的机会规模，它的增长是否会不受供应限制的阻碍。回到2019年，英特尔(INTC)仅在以数据为中心的市场每季度销售额就达到8-100亿美元。人们普遍认为，英特尔是数据中心的唯一名称，当时占据了大部分份额。AMD第二季度数据中心收入占$3.85 B营收的20%，总计不到$1B。理论上，如果AMD未来保持相对明显的技术领先地位，它在这个市场上的表现仍然可以是5-8倍。虽然相对于当前的销售运行率，每项增长业务都指向一个天文数字的总目标市场，但我认为AMD值得认真对待其目标。</blockquote> <img src=\"https://static.tigerbbs.com/6306051dadfd569fd1f863afea83c6c6\" tg-width=\"640\" tg-height=\"353\" width=\"100%\" height=\"auto\">Source:AMD Investor Presentation<blockquote>资料来源：AMD投资者介绍</blockquote> The company has been benchmarking a notch above both, the x86 market, and comparable ARM-based units for the time being. ARM-based chips can well be a long-term threat, but high Cap-Ex, R&amp;D, and scaling mass operations may still take time. Apple and the big infrastructure providers (AWS, Azure, and GCP) are loading up their efforts on alternative architectures, but at least for now, it appears that the market opportunity is free to capture for AMD. It's worth mentioning that all three infrastructure providers also loaded up on AMD chips last quarter.<blockquote>目前，该公司一直在对x86市场和类似的基于ARM的设备进行基准测试。基于ARM的芯片很可能是一个长期威胁，但高资本、研发和大规模运营可能仍需要时间。苹果和大型基础设施提供商（AWS、Azure和GCP）正在努力开发替代架构，但至少就目前而言，AMD似乎可以自由抓住市场机会。值得一提的是，这三家基础设施提供商上季度也都加载了AMD芯片。</blockquote> AMD is a vanilla growth company and if this supply issue is subsiding, I don't see why it can't grow at 30%+ YoY for the coming 2-3 years should foundry capacity keep up as well. Semiconductors are known to be a cyclical industry, but at the moment AMD appears to be a straight growth company. There'll be ebbs and flows but when one business has clear technical superiority, the market responds with this straight-line demand.<blockquote>AMD是一家普通的成长型公司，如果这个供应问题正在消退，我不明白为什么它不能在未来2-3年内以30%以上的同比增长，而代工产能也能跟上。众所周知，半导体是一个周期性行业，但目前AMD似乎是一家直线增长的公司。会有起伏，但当一家企业拥有明显的技术优势时，市场会以这种直线需求做出反应。</blockquote> Weighing Future Supply Constraints<blockquote>权衡未来供应限制</blockquote> The biggest \"IF...\" to the long-term thesis revolves around future supply constraints. One can speculate on the capacity available at TSM at 5nm, 3nm and beyond, or speculate on the precise relationship and market dynamics that are influencing players getting the bigger contracts.<blockquote>最大的“如果……”从长远来看，论文围绕着未来的供应限制。人们可以推测TSM在5纳米、3纳米及以上的可用容量，或者推测影响参与者获得更大合同的精确关系和市场动态。</blockquote> In my opinion, drawing any conclusions is difficult and only pertains to the short-term view as we're not quite sure where the fabs and contracts are going to end up in 2022 yet. The wiser outlook for me given my limited knowledge of the semi-market is to take AMD's guidance as my main data point and go from there. This may be overly simplistic but I've seen several experts turn out to be relatively \"hit or miss\" on the micro aspects of capacities, supply/demand, and inventory. After all, look at that big earnings surprise, despite the 20 or so sell-side analysts who apparently know stuff. A long-term thesis and a long-term view are simply easier to hold in my book and is almost consistently underrated by market participants.<blockquote>在我看来，得出任何结论都很困难，而且只涉及短期观点，因为我们还不太确定2022年晶圆厂和合同将在哪里结束。鉴于我对半市场的了解有限，对我来说，更明智的前景是将AMD的指导作为我的主要数据点，并从那里开始。这可能过于简单，但我已经看到几位专家在产能、供应/需求和库存的微观方面相对“偶然”。毕竟，看看这个巨大的盈利惊喜，尽管有20名左右的卖方分析师显然知道一些事情。在我的书中，长期论点和长期观点更容易持有，但几乎总是被市场参与者低估。</blockquote> The company has been slightly conservative for the past few quarters and chances are they're doing it again. A FY 60% YoY guidance does mean that there'll be substantial sales deceleration on a sequential basis and we won't get the big jumps we saw in Q1 and Q2 of this year. With 2022, who knows? TSM is building out capacity in Nanjing, China, and Arizona in the US, but the fabs are not particularly large and how that share will be allocated across clients or influence the overall mix of technologies remains somewhat of a mystery to me.<blockquote>该公司在过去几个季度一直略显保守，他们很可能会再次这样做。财年同比60%的指引确实意味着销售将出现环比大幅减速，并且我们不会出现今年第一季度和第二季度的大幅增长。到了2022年，谁知道呢？TSM正在中国南京和美国亚利桑那州建设产能，但晶圆厂并不是特别大，这一份额将如何在客户之间分配或影响整体技术组合对我来说仍然是个谜。</blockquote> With this uncertainty, I propose that investors should weigh the financials and valuations against the long-term goal of a $75B TAM and the likelihood the company may get there.<blockquote>鉴于这种不确定性，我建议投资者应该权衡财务状况和估值与750亿美元TAM的长期目标以及公司实现这一目标的可能性。</blockquote> AMD Stock Valuation &amp; Financials<blockquote>AMD股票估值和财务状况</blockquote> <img src=\"https://static.tigerbbs.com/66a5d59a36592bb4163783a2079ef4a3\" tg-width=\"640\" tg-height=\"299\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> FY 2021 will most likely record +60% YoY growth as well as a 20%+ FCF margin. Both growth and profitability should be weighed in conjunction with relevant valuation multiples. Growth brings the future forward to us faster, thus delivering us excess returns on outperformance, and FCF indicates an expansion of the company's cash arsenal to spend over an acquisition, or future R&amp;D and product development, or a sales force. With this current year, the numbers on both fronts are stellar.<blockquote>2021财年很可能实现+60%的同比增长以及20%以上的自由现金流利润率。增长和盈利能力都应结合相关估值倍数进行权衡。增长为我们带来了更快的未来，从而为我们带来了优异表现的超额回报，而自由现金流表明公司现金库的扩张，用于收购、未来的研发和产品开发或销售队伍。今年，这两方面的数字都非常出色。</blockquote> <img src=\"https://static.tigerbbs.com/5580facdb4c177c51b70292501c25a49\" tg-width=\"640\" tg-height=\"427\" width=\"100%\" height=\"auto\">Source: Koyfin<blockquote>资料来源：Koyfin</blockquote> If we are thinking long-term, an NTM EV/S of 7.7x and NTM EV/EBITDA of 30.3x is perfectly reasonable to me given current dynamics. This applies in both Xilinx and non-Xilinx scenarios. A sales growth of 20-25% YoY growth for the next 2-3 years is enough to justify holding AMD at the current price, in my opinion. That's not asking too much against the supply capacity issues, so I like the odds. We've seen a large surge in stock price, but the multiples are still relatively tame. Over a long-term period, these should compress steadily. FYI, +26%YoY for 3 years is double.<blockquote>如果我们从长远考虑，考虑到当前的动态，NTM EV/S为7.7倍，NTM EV/EBITDA为30.3倍对我来说是完全合理的。这适用于Xilinx和非Xilinx场景。在我看来，未来2-3年销售额同比增长20-25%足以证明以当前价格持有AMD是合理的。考虑到供应能力问题，这并没有要求太多，所以我喜欢这种可能性。我们看到股价大幅上涨，但市盈率仍然相对平淡。从长远来看，这些应该会稳步压缩。仅供参考，3年同比增长26%，翻了一番。</blockquote> Across the current competitive landscape, I can't see Intel leapfrogging its own state of technology to deliver at scale any time soon. The reason they're able to hold their ground is due to fab constraints, but the fundamentals have been in secular decline. In my opinion, the technically talented Gelsinger at the helm offers strong leadership but big ships like Intel are slow to turn the course. It will take a monumental effort to catch up, and a completely separate challenge to produce at scale if they aren't doing it with in-house manufacturing capabilities. Contracting TSM for building Intel chips will likely lead to the same supply issues given their sheer size.<blockquote>在当前的竞争格局中，我认为英特尔不会很快超越自己的技术水平以实现大规模交付。他们能够坚守阵地的原因是由于晶圆厂的限制，但基本面一直在长期下滑。在我看来，技术天才的基辛格掌舵提供了强有力的领导力，但像英特尔这样的大船转向缓慢。如果他们没有内部制造能力，则需要付出巨大的努力才能赶上，而大规模生产则是一个完全独立的挑战。鉴于其庞大的规模，与TSM签订制造英特尔芯片的合同可能会导致同样的供应问题。</blockquote> ARM developments on the other hand should continue to impress, but for the time being, I reckon AMD's tech and execution should hold momentum. As a result, the current price is worth holding on to from a risk/reward perspective for long-term investors.<blockquote>另一方面，ARM的发展应该会继续令人印象深刻，但就目前而言，我认为AMD的技术和执行力应该会保持势头。因此，对于长期投资者来说，从风险/回报的角度来看，当前价格值得持有。</blockquote> Risks<blockquote>风险</blockquote> <ul> <li>Loss Of Tech Leadership:Other x86, ARM, or perhaps RISC-V based tech poses as a challenge.</li> <li>Supply Constraints:Issues can continue into 2022, there's a lot of ambiguity here. A FY 60% YoY guidance translates to deceleration in the coming quarters. Flatlining growth in 2022 may induce weaker price action.</li> <li>Macro:The economic and business cycles turn unfavourable for chip upgrades.</li> <li>Systemic:General broader market-based risk. AMD has had higher volatility compared to benchmarks and will likely continue to do so. Sell-offs may also lead to deep and elongated drawdowns.</li> <li>Geopolitical:Taiwan Semiconductor Manufacturing, the biggest foundry around, is in a geopolitical hot zone amidst current China-US relations.</li> </ul> Ending Notes<blockquote><ul><li>失去技术领导地位：其他基于x86、ARM或者RISC-V的技术构成了挑战。</li><li>供应限制：问题可能会持续到2022年，这里有很多模糊之处。财年同比60%的指引意味着未来几个季度的减速。2022年增长趋于平缓可能会导致价格走势疲软。</li><li>宏：经济和商业周期对芯片升级不利。</li><li>全身性：一般更广泛的市场风险。与基准相比，AMD的波动性更高，并且可能会继续如此。抛售也可能导致深度和长时间的回撤。</li><li>地缘政治：台积电是最大的代工厂，在当前中美关系中处于地缘政治热点地区。</li></ul>尾注</blockquote> Every successive generation of AMD processors has had larger leaps in progress than the previous-gen vs Intel, for the past 5 years or so. The next batch are building off of strong technical foundations and are upgrading to the next node size every few years. When the company has demonstrated such momentum in their tech, there's little reason to expect it to change at least in the short term.<blockquote>在过去5年左右的时间里，AMD的每一代处理器都比上一代处理器取得了更大的进步。下一批正在建立强大的技术基础，并每隔几年升级到下一个节点规模。当该公司在技术上表现出如此强劲的势头时，没有理由期望它至少在短期内会发生变化。</blockquote> In 2019 and 2020, the enthusiast market appropriately recognized the superiority of AMD's chips and began building their PCs with AMD desktop processors. Later last year, the company received a boost in sales as chip suppliers to both PlayStation and Xbox. However, the enterprise and by extension, the EESC (Enterprise, Embedded, &amp; Semi-Custom) revenue didn't show meaningful growth until 2021. During this last Q2, the segment saw growth of 183% YoY, still contributing to &lt;50% of the sales mix. Going forward, management expects it to contribute to more of the mix. As with many markets, enterprises tend to lag consumers in tech adoption but the long-term investors should rest assured that big enterprises have finally arrived at AMD's doorstep.<blockquote>在2019年和2020年，发烧友市场适当地认识到AMD芯片的优越性，并开始使用AMD桌面处理器构建他们的PC。去年晚些时候，作为PlayStation和Xbox的芯片供应商，该公司的销售额都有所增长。然而，企业以及EESC（企业、嵌入式和半定制）收入直到2021年才显示出有意义的增长。在上一个第二季度，该细分市场同比增长183%，仍占销售组合的不到50%。展望未来，管理层预计它将为更多的组合做出贡献。与许多市场一样，企业在技术采用方面往往落后于消费者，但长期投资者应该放心，大企业终于来到了AMD的家门口。</blockquote> Finally, any evaluation of the company is amiss if it doesn't acknowledge what Lisa Su &amp; Co. have achieved taking the stock from &lt;$2 to &gt;$100 a share. There are very few CEOs I'd rate 10/10 and Lisa Su is one of them. She's in the same company as Satya Nadella, Jeff Bezos, and Elon Musk. It just makes sense to keep betting on great management and great products. A thesis can be that simple sometimes and the price is fair despite the surge to $105+. The Abstract Portfolio is long AMD.<blockquote>最后，如果不承认Lisa Su&amp;Co.在收购该公司股票时所取得的成就，那么对该公司的任何评价都是错误的&lt;$2 to &gt;每股100美元。我给10/10的首席执行官很少，苏姿丰就是其中之一。她与Satya Nadella、杰夫·贝索斯和Elon Musk在同一家公司。继续押注于伟大的管理和伟大的产品是有意义的。一篇论文有时可以这么简单，尽管价格飙升至105美元以上，但价格还是很合理的。抽象投资组合是多头AMD。</blockquote> Searching for more opportunities in tech &amp; growth? Try out the Abstract Portfolio.<blockquote>在科技和增长领域寻找更多机会？尝试抽象作品集。</blockquote> <img src=\"https://static.tigerbbs.com/a504a35a61a34a2f19674e2ebdfbadc7\" tg-width=\"640\" tg-height=\"253\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>AMD Eats More Cake<blockquote>AMD吃更多蛋糕</blockquote></title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 12.5px; color: #7E829C; margin: 0;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nAMD Eats More Cake<blockquote>AMD吃更多蛋糕</blockquote>\n</h2>\n<h4 class=\"meta\">\n\nseekingalpha2021-08-04 09:22\n\n</h4>\n</header>\n<article>\nSummary<blockquote>总结</blockquote> <ul> <li>AMD had a great quarter, and the stock price was appropriately rewarded with a price surge. The company is not as supply-constrained as the market thought it would be.</li> <li>Long-term investors should keep locked in on the bigger narrative. A $79B TAM that is not as outlandish, and a $30-$40 data center opportunity. AMD is still scratching the surface.</li> <li>Supply constraints may well continue to pose challenges. We should weigh the odds of middling growth against financials and valuations.</li> <li>At an NTM EV/S of 7.7x and NTM EV/EBITDA of 30.3x, multiples are reasonable despite the uncertain supply scenario.</li> <li>The Abstract Portfolio is long AMD.</li> </ul> <img src=\"https://static.tigerbbs.com/d13f5b67b0b560ab7300802990149668\" tg-width=\"1536\" tg-height=\"1024\" referrerpolicy=\"no-referrer\">Vlad Dmytrenko/iStock via Getty Images<blockquote><ul><li>AMD度过了一个出色的季度，股价也得到了价格飙升的适当回报。该公司并不像市场想象的那样受到供应限制。</li><li>长期投资者应该继续关注更大的故事。价值790亿美元的TAM并不奇怪，还有价值30-40美元的数据中心机会。AMD仍在触及表面。</li><li>供应限制很可能继续带来挑战。我们应该权衡适度增长与财务和估值的可能性。</li><li>NTM EV/S为7.7倍，NTM EV/EBITDA为30.3倍，尽管供应情况不确定，但倍数仍是合理的。</li><li>抽象投资组合是多头AMD。</li></ul>Vlad Dmytrenko/iStock来自Getty Images</blockquote> By \"cake\", I mean \"market share\".<blockquote>我说的“蛋糕”是指“市场份额”。</blockquote> In my view, AMD's (AMD) bull case scenario is simple: market share gains with sustained technology leadership for years to come.<blockquote>在我看来，AMD（AMD）的牛市情景很简单：未来几年凭借持续的技术领先地位获得市场份额。</blockquote> With the latest earnings results and seemingly big traction in the enterprise, data-centric, and server markets, the bull-case scenario is looking strong. I'd put the odds in AMD's favour to win going forward.<blockquote>随着最新的盈利结果以及企业、以数据为中心和服务器市场的巨大吸引力，牛市前景看起来很强劲。我认为AMD未来获胜的可能性很大。</blockquote> Not So Supply-Constrained Now<blockquote>现在供应不那么紧张了</blockquote> AMD's latest earnings results were stellar, beating on both revenue and earnings estimates. The company is firing on all cylinders. Check out these graphs with the latest Q2 results towards the right.<blockquote>AMD最新的盈利结果非常出色，收入和盈利都超出了预期。该公司正在全力以赴。看看这些图表，右边是最新的Q2结果。</blockquote> <img src=\"https://static.tigerbbs.com/98f0702e1e6822224147bd4b983c88ed\" tg-width=\"582\" tg-height=\"315\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> <img src=\"https://static.tigerbbs.com/dbb02619444f2ded968c971634ca8be9\" tg-width=\"573\" tg-height=\"316\" width=\"100%\" height=\"auto\">Source:Q2 2021 Quarterly Results<blockquote>资料来源：2021年第二季度季度业绩</blockquote> Over the past few quarters, we've seen substantial momentum in the fundamentals. Sales have accelerated (cake has been eaten), gross margins have expanded, and the company is comfortably free cash flow generative at a 23.1% margin in Q2. They can capture this kind of free cash flow because:<blockquote>在过去的几个季度中，我们看到了基本面的强劲势头。销售加速（蛋糕已经被吃掉），毛利率扩大，公司第二季度的自由现金流利润率为23.1%。他们可以获取这种自由现金流，因为：</blockquote> <ol> <li>They have the best in class products in the computing market for most of their target applications, which translates to pricing power and profit-taking ability.</li> <li>The world keeps wanting more computing power; the pandemic has accelerated demand and with AMD positioned with best in class products, it has benefitted from demand substantially outweighing supply.</li> </ol> The big concern heading into 2021 was the glass ceiling on sales growth for the semiconductor industry (and the fabless AMD) due to foundries like TSMC (TSM) and global running at max capacity with the ever-increasing demand across all computing applications. This Q2, AMD pleasantly surprised us by raising their FY2021 guidance to 60% YoY from the previous 50% YoY. The company has incrementally made progress in building up the supply every consecutive quarter and appears to be on track to close in late 2021 with higher growth rates. Lisa Su expects it to get easier in 2022.<blockquote><ol><li>对于大多数目标应用程序，他们拥有计算市场上同类最佳的产品，这转化为定价能力和获利能力。</li><li>世界一直想要更多的计算能力；疫情加速了需求，AMD凭借一流的产品定位，受益于需求大大超过供应。</li></ol>进入2021年，最大的担忧是半导体行业（以及无晶圆厂AMD）销售增长的玻璃天花板，这是由于台积电(TSM)等代工厂和global以最大产能运行以及所有计算应用需求不断增长。今年第二季度，AMD将2021财年同比增长指引从之前的50%上调至60%，令我们感到惊喜。该公司在连续每个季度增加供应方面都取得了逐步进展，似乎有望在2021年底以更高的增长率完成。Lisa Su预计2022年会变得更容易。</blockquote> And what I've said previously is, certainly, we do see some level of constraints, but we are making progress each quarter. And we made progress in the second quarter that enabled us to exceed the original guidance. And as we go into the second half of the year, we're continuing to bring on extra supply each quarter, which is leading to the full year guidance raise that we have. I think it improves in 2022. We've been planning for significant growth. Our model is one where we're going to drive significant growth. - CEO Lisa Su,Q2 Earnings Transcript The above statement is a reason to be optimistic. So the market rewarded AMD appropriately with a nice 2-3 day surge given the improved outlook. However, to properly contextualize whether AMD makes for a strong investment, it makes sense to look longer-term.<blockquote>我之前说过的是，当然，我们确实看到了一定程度的限制，但我们每个季度都在取得进展。我们在第二季度取得了进展，使我们能够超过最初的指导。随着我们进入下半年，我们每个季度都会继续增加供应，这导致我们的全年指导上调。我认为2022年会有所改善。我们一直在计划显着增长。我们的模式是我们将推动显着增长的模式。-首席执行官Lisa Su，第二季度收益记录上述说法是一个乐观的理由。因此，鉴于前景的改善，市场适当地奖励了AMD 2-3天的上涨。然而，为了正确理解AMD是否是一项强有力的投资，从长远来看是有意义的。</blockquote> How Big Is The Cake?<blockquote>蛋糕有多大？</blockquote> I don't think the market is fully factoring in the size of the opportunity at hand for AMD, shall it grow unhindered by supply constraints. Rewind back to 2019, and Intel (INTC) was recording $8-10B in sales per quarter for the data-centric market only. It was widely understood that Intel was the only name in town for the data centre and held most of the share back then. AMD's Q2 data centre revenue contributed to 20% of the $3.85B top-line, amounting to less than ~$1B. Theoretically, AMD can still be 5-8x in this market should it maintain its relatively obvious technological leadership going forward. While every growth business points towards an astronomic total addressable market relative to the current sales run-rate, I think it's worth taking AMD seriously on its targets.<blockquote>我认为市场没有充分考虑到AMD面临的机会规模，它的增长是否会不受供应限制的阻碍。回到2019年，英特尔(INTC)仅在以数据为中心的市场每季度销售额就达到8-100亿美元。人们普遍认为，英特尔是数据中心的唯一名称，当时占据了大部分份额。AMD第二季度数据中心收入占$3.85 B营收的20%，总计不到$1B。理论上，如果AMD未来保持相对明显的技术领先地位，它在这个市场上的表现仍然可以是5-8倍。虽然相对于当前的销售运行率，每项增长业务都指向一个天文数字的总目标市场，但我认为AMD值得认真对待其目标。</blockquote> <img src=\"https://static.tigerbbs.com/6306051dadfd569fd1f863afea83c6c6\" tg-width=\"640\" tg-height=\"353\" width=\"100%\" height=\"auto\">Source:AMD Investor Presentation<blockquote>资料来源：AMD投资者介绍</blockquote> The company has been benchmarking a notch above both, the x86 market, and comparable ARM-based units for the time being. ARM-based chips can well be a long-term threat, but high Cap-Ex, R&amp;D, and scaling mass operations may still take time. Apple and the big infrastructure providers (AWS, Azure, and GCP) are loading up their efforts on alternative architectures, but at least for now, it appears that the market opportunity is free to capture for AMD. It's worth mentioning that all three infrastructure providers also loaded up on AMD chips last quarter.<blockquote>目前，该公司一直在对x86市场和类似的基于ARM的设备进行基准测试。基于ARM的芯片很可能是一个长期威胁，但高资本、研发和大规模运营可能仍需要时间。苹果和大型基础设施提供商（AWS、Azure和GCP）正在努力开发替代架构，但至少就目前而言，AMD似乎可以自由抓住市场机会。值得一提的是，这三家基础设施提供商上季度也都加载了AMD芯片。</blockquote> AMD is a vanilla growth company and if this supply issue is subsiding, I don't see why it can't grow at 30%+ YoY for the coming 2-3 years should foundry capacity keep up as well. Semiconductors are known to be a cyclical industry, but at the moment AMD appears to be a straight growth company. There'll be ebbs and flows but when one business has clear technical superiority, the market responds with this straight-line demand.<blockquote>AMD是一家普通的成长型公司，如果这个供应问题正在消退，我不明白为什么它不能在未来2-3年内以30%以上的同比增长，而代工产能也能跟上。众所周知，半导体是一个周期性行业，但目前AMD似乎是一家直线增长的公司。会有起伏，但当一家企业拥有明显的技术优势时，市场会以这种直线需求做出反应。</blockquote> Weighing Future Supply Constraints<blockquote>权衡未来供应限制</blockquote> The biggest \"IF...\" to the long-term thesis revolves around future supply constraints. One can speculate on the capacity available at TSM at 5nm, 3nm and beyond, or speculate on the precise relationship and market dynamics that are influencing players getting the bigger contracts.<blockquote>最大的“如果……”从长远来看，论文围绕着未来的供应限制。人们可以推测TSM在5纳米、3纳米及以上的可用容量，或者推测影响参与者获得更大合同的精确关系和市场动态。</blockquote> In my opinion, drawing any conclusions is difficult and only pertains to the short-term view as we're not quite sure where the fabs and contracts are going to end up in 2022 yet. The wiser outlook for me given my limited knowledge of the semi-market is to take AMD's guidance as my main data point and go from there. This may be overly simplistic but I've seen several experts turn out to be relatively \"hit or miss\" on the micro aspects of capacities, supply/demand, and inventory. After all, look at that big earnings surprise, despite the 20 or so sell-side analysts who apparently know stuff. A long-term thesis and a long-term view are simply easier to hold in my book and is almost consistently underrated by market participants.<blockquote>在我看来，得出任何结论都很困难，而且只涉及短期观点，因为我们还不太确定2022年晶圆厂和合同将在哪里结束。鉴于我对半市场的了解有限，对我来说，更明智的前景是将AMD的指导作为我的主要数据点，并从那里开始。这可能过于简单，但我已经看到几位专家在产能、供应/需求和库存的微观方面相对“偶然”。毕竟，看看这个巨大的盈利惊喜，尽管有20名左右的卖方分析师显然知道一些事情。在我的书中，长期论点和长期观点更容易持有，但几乎总是被市场参与者低估。</blockquote> The company has been slightly conservative for the past few quarters and chances are they're doing it again. A FY 60% YoY guidance does mean that there'll be substantial sales deceleration on a sequential basis and we won't get the big jumps we saw in Q1 and Q2 of this year. With 2022, who knows? TSM is building out capacity in Nanjing, China, and Arizona in the US, but the fabs are not particularly large and how that share will be allocated across clients or influence the overall mix of technologies remains somewhat of a mystery to me.<blockquote>该公司在过去几个季度一直略显保守，他们很可能会再次这样做。财年同比60%的指引确实意味着销售将出现环比大幅减速，并且我们不会出现今年第一季度和第二季度的大幅增长。到了2022年，谁知道呢？TSM正在中国南京和美国亚利桑那州建设产能，但晶圆厂并不是特别大，这一份额将如何在客户之间分配或影响整体技术组合对我来说仍然是个谜。</blockquote> With this uncertainty, I propose that investors should weigh the financials and valuations against the long-term goal of a $75B TAM and the likelihood the company may get there.<blockquote>鉴于这种不确定性，我建议投资者应该权衡财务状况和估值与750亿美元TAM的长期目标以及公司实现这一目标的可能性。</blockquote> AMD Stock Valuation &amp; Financials<blockquote>AMD股票估值和财务状况</blockquote> <img src=\"https://static.tigerbbs.com/66a5d59a36592bb4163783a2079ef4a3\" tg-width=\"640\" tg-height=\"299\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote> FY 2021 will most likely record +60% YoY growth as well as a 20%+ FCF margin. Both growth and profitability should be weighed in conjunction with relevant valuation multiples. Growth brings the future forward to us faster, thus delivering us excess returns on outperformance, and FCF indicates an expansion of the company's cash arsenal to spend over an acquisition, or future R&amp;D and product development, or a sales force. With this current year, the numbers on both fronts are stellar.<blockquote>2021财年很可能实现+60%的同比增长以及20%以上的自由现金流利润率。增长和盈利能力都应结合相关估值倍数进行权衡。增长为我们带来了更快的未来，从而为我们带来了优异表现的超额回报，而自由现金流表明公司现金库的扩张，用于收购、未来的研发和产品开发或销售队伍。今年，这两方面的数字都非常出色。</blockquote> <img src=\"https://static.tigerbbs.com/5580facdb4c177c51b70292501c25a49\" tg-width=\"640\" tg-height=\"427\" width=\"100%\" height=\"auto\">Source: Koyfin<blockquote>资料来源：Koyfin</blockquote> If we are thinking long-term, an NTM EV/S of 7.7x and NTM EV/EBITDA of 30.3x is perfectly reasonable to me given current dynamics. This applies in both Xilinx and non-Xilinx scenarios. A sales growth of 20-25% YoY growth for the next 2-3 years is enough to justify holding AMD at the current price, in my opinion. That's not asking too much against the supply capacity issues, so I like the odds. We've seen a large surge in stock price, but the multiples are still relatively tame. Over a long-term period, these should compress steadily. FYI, +26%YoY for 3 years is double.<blockquote>如果我们从长远考虑，考虑到当前的动态，NTM EV/S为7.7倍，NTM EV/EBITDA为30.3倍对我来说是完全合理的。这适用于Xilinx和非Xilinx场景。在我看来，未来2-3年销售额同比增长20-25%足以证明以当前价格持有AMD是合理的。考虑到供应能力问题，这并没有要求太多，所以我喜欢这种可能性。我们看到股价大幅上涨，但市盈率仍然相对平淡。从长远来看，这些应该会稳步压缩。仅供参考，3年同比增长26%，翻了一番。</blockquote> Across the current competitive landscape, I can't see Intel leapfrogging its own state of technology to deliver at scale any time soon. The reason they're able to hold their ground is due to fab constraints, but the fundamentals have been in secular decline. In my opinion, the technically talented Gelsinger at the helm offers strong leadership but big ships like Intel are slow to turn the course. It will take a monumental effort to catch up, and a completely separate challenge to produce at scale if they aren't doing it with in-house manufacturing capabilities. Contracting TSM for building Intel chips will likely lead to the same supply issues given their sheer size.<blockquote>在当前的竞争格局中，我认为英特尔不会很快超越自己的技术水平以实现大规模交付。他们能够坚守阵地的原因是由于晶圆厂的限制，但基本面一直在长期下滑。在我看来，技术天才的基辛格掌舵提供了强有力的领导力，但像英特尔这样的大船转向缓慢。如果他们没有内部制造能力，则需要付出巨大的努力才能赶上，而大规模生产则是一个完全独立的挑战。鉴于其庞大的规模，与TSM签订制造英特尔芯片的合同可能会导致同样的供应问题。</blockquote> ARM developments on the other hand should continue to impress, but for the time being, I reckon AMD's tech and execution should hold momentum. As a result, the current price is worth holding on to from a risk/reward perspective for long-term investors.<blockquote>另一方面，ARM的发展应该会继续令人印象深刻，但就目前而言，我认为AMD的技术和执行力应该会保持势头。因此，对于长期投资者来说，从风险/回报的角度来看，当前价格值得持有。</blockquote> Risks<blockquote>风险</blockquote> <ul> <li>Loss Of Tech Leadership:Other x86, ARM, or perhaps RISC-V based tech poses as a challenge.</li> <li>Supply Constraints:Issues can continue into 2022, there's a lot of ambiguity here. A FY 60% YoY guidance translates to deceleration in the coming quarters. Flatlining growth in 2022 may induce weaker price action.</li> <li>Macro:The economic and business cycles turn unfavourable for chip upgrades.</li> <li>Systemic:General broader market-based risk. AMD has had higher volatility compared to benchmarks and will likely continue to do so. Sell-offs may also lead to deep and elongated drawdowns.</li> <li>Geopolitical:Taiwan Semiconductor Manufacturing, the biggest foundry around, is in a geopolitical hot zone amidst current China-US relations.</li> </ul> Ending Notes<blockquote><ul><li>失去技术领导地位：其他基于x86、ARM或者RISC-V的技术构成了挑战。</li><li>供应限制：问题可能会持续到2022年，这里有很多模糊之处。财年同比60%的指引意味着未来几个季度的减速。2022年增长趋于平缓可能会导致价格走势疲软。</li><li>宏：经济和商业周期对芯片升级不利。</li><li>全身性：一般更广泛的市场风险。与基准相比，AMD的波动性更高，并且可能会继续如此。抛售也可能导致深度和长时间的回撤。</li><li>地缘政治：台积电是最大的代工厂，在当前中美关系中处于地缘政治热点地区。</li></ul>尾注</blockquote> Every successive generation of AMD processors has had larger leaps in progress than the previous-gen vs Intel, for the past 5 years or so. The next batch are building off of strong technical foundations and are upgrading to the next node size every few years. When the company has demonstrated such momentum in their tech, there's little reason to expect it to change at least in the short term.<blockquote>在过去5年左右的时间里，AMD的每一代处理器都比上一代处理器取得了更大的进步。下一批正在建立强大的技术基础，并每隔几年升级到下一个节点规模。当该公司在技术上表现出如此强劲的势头时，没有理由期望它至少在短期内会发生变化。</blockquote> In 2019 and 2020, the enthusiast market appropriately recognized the superiority of AMD's chips and began building their PCs with AMD desktop processors. Later last year, the company received a boost in sales as chip suppliers to both PlayStation and Xbox. However, the enterprise and by extension, the EESC (Enterprise, Embedded, &amp; Semi-Custom) revenue didn't show meaningful growth until 2021. During this last Q2, the segment saw growth of 183% YoY, still contributing to &lt;50% of the sales mix. Going forward, management expects it to contribute to more of the mix. As with many markets, enterprises tend to lag consumers in tech adoption but the long-term investors should rest assured that big enterprises have finally arrived at AMD's doorstep.<blockquote>在2019年和2020年，发烧友市场适当地认识到AMD芯片的优越性，并开始使用AMD桌面处理器构建他们的PC。去年晚些时候，作为PlayStation和Xbox的芯片供应商，该公司的销售额都有所增长。然而，企业以及EESC（企业、嵌入式和半定制）收入直到2021年才显示出有意义的增长。在上一个第二季度，该细分市场同比增长183%，仍占销售组合的不到50%。展望未来，管理层预计它将为更多的组合做出贡献。与许多市场一样，企业在技术采用方面往往落后于消费者，但长期投资者应该放心，大企业终于来到了AMD的家门口。</blockquote> Finally, any evaluation of the company is amiss if it doesn't acknowledge what Lisa Su &amp; Co. have achieved taking the stock from &lt;$2 to &gt;$100 a share. There are very few CEOs I'd rate 10/10 and Lisa Su is one of them. She's in the same company as Satya Nadella, Jeff Bezos, and Elon Musk. It just makes sense to keep betting on great management and great products. A thesis can be that simple sometimes and the price is fair despite the surge to $105+. The Abstract Portfolio is long AMD.<blockquote>最后，如果不承认Lisa Su&amp;Co.在收购该公司股票时所取得的成就，那么对该公司的任何评价都是错误的&lt;$2 to &gt;每股100美元。我给10/10的首席执行官很少，苏姿丰就是其中之一。她与Satya Nadella、杰夫·贝索斯和Elon Musk在同一家公司。继续押注于伟大的管理和伟大的产品是有意义的。一篇论文有时可以这么简单，尽管价格飙升至105美元以上，但价格还是很合理的。抽象投资组合是多头AMD。</blockquote> Searching for more opportunities in tech &amp; growth? Try out the Abstract Portfolio.<blockquote>在科技和增长领域寻找更多机会？尝试抽象作品集。</blockquote> <img src=\"https://static.tigerbbs.com/a504a35a61a34a2f19674e2ebdfbadc7\" tg-width=\"640\" tg-height=\"253\" referrerpolicy=\"no-referrer\" width=\"100%\" height=\"auto\"><blockquote></blockquote>\n<div class=\"bt-text\">\n\n\n 来源：<a href=\"https://seekingalpha.com/article/4444368-amd-eats-more-cake\">seekingalpha</a>\n为提升您的阅读体验，我们对本页面进行了排版优化\n\n\n</div>\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"AMD":"美国超微公司"},"source_url":"https://seekingalpha.com/article/4444368-amd-eats-more-cake","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"1126440748","content_text":"Summary\n\nAMD had a great quarter, and the stock price was appropriately rewarded with a price surge. The company is not as supply-constrained as the market thought it would be.\nLong-term investors should keep locked in on the bigger narrative. A $79B TAM that is not as outlandish, and a $30-$40 data center opportunity. AMD is still scratching the surface.\nSupply constraints may well continue to pose challenges. We should weigh the odds of middling growth against financials and valuations.\nAt an NTM EV/S of 7.7x and NTM EV/EBITDA of 30.3x, multiples are reasonable despite the uncertain supply scenario.\nThe Abstract Portfolio is long AMD.\n\nVlad Dmytrenko/iStock via Getty Images\nBy \"cake\", I mean \"market share\".\nIn my view, AMD's (AMD) bull case scenario is simple: market share gains with sustained technology leadership for years to come.\nWith the latest earnings results and seemingly big traction in the enterprise, data-centric, and server markets, the bull-case scenario is looking strong. I'd put the odds in AMD's favour to win going forward.\nNot So Supply-Constrained Now\nAMD's latest earnings results were stellar, beating on both revenue and earnings estimates. The company is firing on all cylinders. Check out these graphs with the latest Q2 results towards the right.\n\nSource:Q2 2021 Quarterly Results\nOver the past few quarters, we've seen substantial momentum in the fundamentals. Sales have accelerated (cake has been eaten), gross margins have expanded, and the company is comfortably free cash flow generative at a 23.1% margin in Q2. They can capture this kind of free cash flow because:\n\nThey have the best in class products in the computing market for most of their target applications, which translates to pricing power and profit-taking ability.\nThe world keeps wanting more computing power; the pandemic has accelerated demand and with AMD positioned with best in class products, it has benefitted from demand substantially outweighing supply.\n\nThe big concern heading into 2021 was the glass ceiling on sales growth for the semiconductor industry (and the fabless AMD) due to foundries like TSMC (TSM) and global running at max capacity with the ever-increasing demand across all computing applications. This Q2, AMD pleasantly surprised us by raising their FY2021 guidance to 60% YoY from the previous 50% YoY. The company has incrementally made progress in building up the supply every consecutive quarter and appears to be on track to close in late 2021 with higher growth rates. Lisa Su expects it to get easier in 2022.\n\n And what I've said previously is, certainly, we do see some level of constraints, but we are making progress each quarter. And we made progress in the second quarter that enabled us to exceed the original guidance. And as we go into the second half of the year, we're continuing to bring on extra supply each quarter, which is leading to the full year guidance raise that we have. I think it improves in 2022. We've been planning for significant growth. Our model is one where we're going to drive significant growth.\n - CEO Lisa Su,Q2 Earnings Transcript\n\nThe above statement is a reason to be optimistic. So the market rewarded AMD appropriately with a nice 2-3 day surge given the improved outlook. However, to properly contextualize whether AMD makes for a strong investment, it makes sense to look longer-term.\nHow Big Is The Cake?\nI don't think the market is fully factoring in the size of the opportunity at hand for AMD, shall it grow unhindered by supply constraints. Rewind back to 2019, and Intel (INTC) was recording $8-10B in sales per quarter for the data-centric market only. It was widely understood that Intel was the only name in town for the data centre and held most of the share back then. AMD's Q2 data centre revenue contributed to 20% of the $3.85B top-line, amounting to less than ~$1B. Theoretically, AMD can still be 5-8x in this market should it maintain its relatively obvious technological leadership going forward. While every growth business points towards an astronomic total addressable market relative to the current sales run-rate, I think it's worth taking AMD seriously on its targets.\nSource:AMD Investor Presentation\nThe company has been benchmarking a notch above both, the x86 market, and comparable ARM-based units for the time being. ARM-based chips can well be a long-term threat, but high Cap-Ex, R&D, and scaling mass operations may still take time. Apple and the big infrastructure providers (AWS, Azure, and GCP) are loading up their efforts on alternative architectures, but at least for now, it appears that the market opportunity is free to capture for AMD. It's worth mentioning that all three infrastructure providers also loaded up on AMD chips last quarter.\nAMD is a vanilla growth company and if this supply issue is subsiding, I don't see why it can't grow at 30%+ YoY for the coming 2-3 years should foundry capacity keep up as well. Semiconductors are known to be a cyclical industry, but at the moment AMD appears to be a straight growth company. There'll be ebbs and flows but when one business has clear technical superiority, the market responds with this straight-line demand.\nWeighing Future Supply Constraints\nThe biggest \"IF...\" to the long-term thesis revolves around future supply constraints. One can speculate on the capacity available at TSM at 5nm, 3nm and beyond, or speculate on the precise relationship and market dynamics that are influencing players getting the bigger contracts.\nIn my opinion, drawing any conclusions is difficult and only pertains to the short-term view as we're not quite sure where the fabs and contracts are going to end up in 2022 yet. The wiser outlook for me given my limited knowledge of the semi-market is to take AMD's guidance as my main data point and go from there. This may be overly simplistic but I've seen several experts turn out to be relatively \"hit or miss\" on the micro aspects of capacities, supply/demand, and inventory. After all, look at that big earnings surprise, despite the 20 or so sell-side analysts who apparently know stuff. A long-term thesis and a long-term view are simply easier to hold in my book and is almost consistently underrated by market participants.\nThe company has been slightly conservative for the past few quarters and chances are they're doing it again. A FY 60% YoY guidance does mean that there'll be substantial sales deceleration on a sequential basis and we won't get the big jumps we saw in Q1 and Q2 of this year. With 2022, who knows? TSM is building out capacity in Nanjing, China, and Arizona in the US, but the fabs are not particularly large and how that share will be allocated across clients or influence the overall mix of technologies remains somewhat of a mystery to me.\nWith this uncertainty, I propose that investors should weigh the financials and valuations against the long-term goal of a $75B TAM and the likelihood the company may get there.\nAMD Stock Valuation & Financials\n\nFY 2021 will most likely record +60% YoY growth as well as a 20%+ FCF margin. Both growth and profitability should be weighed in conjunction with relevant valuation multiples. Growth brings the future forward to us faster, thus delivering us excess returns on outperformance, and FCF indicates an expansion of the company's cash arsenal to spend over an acquisition, or future R&D and product development, or a sales force. With this current year, the numbers on both fronts are stellar.\nSource: Koyfin\nIf we are thinking long-term, an NTM EV/S of 7.7x and NTM EV/EBITDA of 30.3x is perfectly reasonable to me given current dynamics. This applies in both Xilinx and non-Xilinx scenarios. A sales growth of 20-25% YoY growth for the next 2-3 years is enough to justify holding AMD at the current price, in my opinion. That's not asking too much against the supply capacity issues, so I like the odds. We've seen a large surge in stock price, but the multiples are still relatively tame. Over a long-term period, these should compress steadily. FYI, +26%YoY for 3 years is double.\nAcross the current competitive landscape, I can't see Intel leapfrogging its own state of technology to deliver at scale any time soon. The reason they're able to hold their ground is due to fab constraints, but the fundamentals have been in secular decline. In my opinion, the technically talented Gelsinger at the helm offers strong leadership but big ships like Intel are slow to turn the course. It will take a monumental effort to catch up, and a completely separate challenge to produce at scale if they aren't doing it with in-house manufacturing capabilities. Contracting TSM for building Intel chips will likely lead to the same supply issues given their sheer size.\nARM developments on the other hand should continue to impress, but for the time being, I reckon AMD's tech and execution should hold momentum. As a result, the current price is worth holding on to from a risk/reward perspective for long-term investors.\nRisks\n\nLoss Of Tech Leadership:Other x86, ARM, or perhaps RISC-V based tech poses as a challenge.\nSupply Constraints:Issues can continue into 2022, there's a lot of ambiguity here. A FY 60% YoY guidance translates to deceleration in the coming quarters. Flatlining growth in 2022 may induce weaker price action.\nMacro:The economic and business cycles turn unfavourable for chip upgrades.\nSystemic:General broader market-based risk. AMD has had higher volatility compared to benchmarks and will likely continue to do so. Sell-offs may also lead to deep and elongated drawdowns.\nGeopolitical:Taiwan Semiconductor Manufacturing, the biggest foundry around, is in a geopolitical hot zone amidst current China-US relations.\n\nEnding Notes\nEvery successive generation of AMD processors has had larger leaps in progress than the previous-gen vs Intel, for the past 5 years or so. The next batch are building off of strong technical foundations and are upgrading to the next node size every few years. When the company has demonstrated such momentum in their tech, there's little reason to expect it to change at least in the short term.\nIn 2019 and 2020, the enthusiast market appropriately recognized the superiority of AMD's chips and began building their PCs with AMD desktop processors. Later last year, the company received a boost in sales as chip suppliers to both PlayStation and Xbox. However, the enterprise and by extension, the EESC (Enterprise, Embedded, & Semi-Custom) revenue didn't show meaningful growth until 2021. During this last Q2, the segment saw growth of 183% YoY, still contributing to <50% of the sales mix. Going forward, management expects it to contribute to more of the mix. As with many markets, enterprises tend to lag consumers in tech adoption but the long-term investors should rest assured that big enterprises have finally arrived at AMD's doorstep.\nFinally, any evaluation of the company is amiss if it doesn't acknowledge what Lisa Su & Co. have achieved taking the stock from <$2 to >$100 a share. There are very few CEOs I'd rate 10/10 and Lisa Su is one of them. She's in the same company as Satya Nadella, Jeff Bezos, and Elon Musk. It just makes sense to keep betting on great management and great products. A thesis can be that simple sometimes and the price is fair despite the surge to $105+. The Abstract Portfolio is long AMD.\nSearching for more opportunities in tech & growth? Try out the Abstract Portfolio.","news_type":1,"symbols_score_info":{"AMD":0.9}},"isVote":1,"tweetType":1,"viewCount":1329,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":["AMD"],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":10,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}

AMD Eats More Cake<blockquote>AMD吃更多蛋糕</blockquote>

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