Chipmaker Advanced Micro Devices painted a bright picture of its growing market opportunity, especially in data centers, at an analyst day presentation. But AMD stock fell on Friday.
The company said its total addressable market is now $300 billion, vs. $79 billion at its 2020 analyst day. AMD expanded its scope with its recent acquisitions of Xilinx and Pensando Systems.
"From the cloud and PCs to communications and intelligent endpoints, AMD's high-performance and adaptive computing solutions play an increasingly larger role in shaping the capabilities of nearly every service and product defining the future of computing today," Chief Executive Lisa Su said at the event late Thursday.
AMD predicted improving profit margins and free cash flow as well as compound annual sales growth of 20% for the next three to four years. Plus, it previewed its latest chips for PCs, gaming, servers and data centers.
AMD Stock Falls With Broader Market
On the stock market today, AMD stock fell 4% to 94.82 amid a broader market sell-off.
Wall Street analysts were upbeat about AMD's prospects after the company's presentation Thursday.
Notably, AMD reiterated its 2022 targets for roughly 60% year over year sales growth and a gross margin of 54% despite concerns of a weakening macroeconomic climate. That's in contrast to rival Intel, which this week said its near-term business outlook is worsening.
Rosenblatt Securities analyst Hans Mosesmann reiterated his buy rating on AMD stock with a price target of 200.
In a note to clients, Mosesmann called AMD's presentation "bullish" and "comprehensive."
Stage Set For Next Phase Of Growth
Cowen analyst Matthew Ramsay said AMD has set the stage for the next phase of its growth story. He rates AMD stock as outperform with a price target of 160.
"The past five years were marked by PC and server CPU (central processing unit) share gains," Ramsay said in a note to clients. "The next five will also be driven by heterogeneous performance leadership and share/value capture in a much broader set of verticals."
He added, "AMD is no longer a story about second-source share in the x86 compute markets."
AMD stock ranks fourth out of 34 stocks in IBD's fabless semiconductor industry group, according to IBD Stock Checkup. It has an IBD Composite Rating of 88 out of 99. The Composite Rating scores a stock's key growth metrics against all other stocks regardless of industry group.
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