Bocom Intl released a report stating that the third-quarter performance of Advanced Micro Devices (AMD.US) met expectations, but the fourth quarter guidance was slightly below market expectations. The company's third-quarter revenue was $6.82 billion, with a gross margin of 53.6%, both in line with the bank's and market expectations. The company guided fourth-quarter revenue in the range of $7.2 billion to $7.8 billion, with the median below the bank's expected $7.92 billion and market expected $7.68 billion, attributing this mainly to pressure on non-gaming datacenter businesses.

The report mentioned that AMD's GPU business is progressing smoothly, while traditional datacenter business continues to recover. The overall revenue of datacenter business in the third quarter reached a record-breaking $3.55 billion, a 122% year-on-year increase. AMD raised its 2024 datacenter GPU revenue forecast from over $4.5 billion to over $5 billion. Bocom Intl also raised its datacenter GPU revenue forecast for this year to $5.2 billion. The bank increased its 2025 full-year datacenter GPU revenue forecast from $9 billion to $9.7 billion. Considering the upstream price increases and the progress of new products like MI325X, MI350 (expected to be launched in the third quarter next year), the bank believes that the pace of gross margin improvement may be slower than previously expected.

Bocom Intl maintains a "buy" rating for AMD and states that due to the continued weak demand for gaming business after the fourth quarter, the bank has lowered its fourth-quarter revenue expectation to $7.74 billion and slightly reduced the revenue for 2024 and 2025 to $25.9 billion and $33.2 billion, respectively. Taking into account the time required for gross margin improvement, the bank adjusted the 2025 revised earnings forecast to $5.32 per share. The target price was lowered from the original $200 to $197, equivalent to a projected 37 times pe ratio in 2025.