Shares of Advanced Micro Devices, Inc. (NASDAQ:AMD) continues to move up and now up by 6% to $119.20 after hitting a new high of $122.49 earlier in the session.
BofA’s Vivek Arya highlighted, “We examine Q2 PC/Server CPU trends based on Mercury Research data. Unless specified we are reviewing x86 trends, although we do also analyze Arm units provided by Mercury for the first time in Q1. Q2 CPU sales +12% YoY (to $16bn) driven by notebooks (NB, +22% YoY) and desktops (DT, +15% YoY), while server fell -1% YoY though improvement from -18% YoY in Q1. CPU units +30% YoY driven by NB +40%, DT +12%, and servers +4%. Inventory correction drove entry-level INTC Celeron CPU shipments lower enabling AMD to gain NB unit share after two consecutive qtrs of losses, but strong business PCs (potentially from return-to-work trend in the US) drove INTC DT units/ASPs higher, facilitating INTC DT share gains.
Per Mercury, the client CPU market census showed broad increase in product availability of both new/old SKUs, signaling an easing of CPU supply constraints. Importantly, AMD server momentum continued in Q2 with unit/value share up 60bp/90bp QoQ and 440bp/690bp YoY likely from successful launch of Milan (now 26% of AMD server shipments vs. 14% in Q1). AMD secure in tech lead (7nm >80% of units in Q2) while INTC 10nm (AMD 7nm equivalent) was just 30%. We reit. Buy on AMD on l-t path to 21% PC/server revenue share (up 300-400bp annually) by 2023E and 25-30%+ share long-term which we believe can drive $5 in EPS Power exiting 2024E.”
