Is AMD's Beat Actually a Miss? Analyst Weighs In

Well, AMD, one of those chip names on fire over the past few sessions, but it's heading lower after second quarter results out moments ago. Joining us now Stacy Rasgon, Bernstein senior semi analyst. He's got an outperform rating, a $600 price target on the stock. Stacy, great to have you with us. What's your take on the quarter and why the stock is down by about 4 and 1/2%? >> Yeah, you know what? I I think it looks fine. Like there's nothing wrong with it. I I do think post Intel Intel had some very strong results. Maybe people were looking for a little bit more. You know, um revenue guide is is decently above the EPS that I'm getting is above. Gross margin's in line. Like maybe that's part of it, but overall I think this looks looks great. Um they also said that data center acceleration is the back of it and I still think as strong as the Q3 outlook is, I still think the big AI ramp with Helios really is a Q4 story. So, I still think there's that to look forward to. So, I I think it's just a little bit of heightened expectations post Intel, but overall as far as I can tell from at least from the first glance, it looks fine to me. >> Do you think we'll get some um good indication on on Helios and how much they expect to ship? >> I don't know if they'll give us numbers or not, but at least qualitatively yeah, I'd expect them to sound pretty good. I mean, you know, they had an AI they had advancing AI like almost like an analyst of an a week or two ago. Um and we got a little color there. I mean, they sounded very positive. They should should be. So, I think it should be very positive. Should be fine. >> Can the Helios stack actually chip away at at Nvidia and its position the market? >> Well, be be careful about chip away. Like are they taking share or they growing share? I mean, they're going from not very much to hopefully a lot. At the same time, it's not like Nvidia and frankly like everybody is is in growing. I'm I'm I think I've said this here a number of times, but I still feel like the the right question is not so much who's winning or losing. It is the opportunity still bigger is it not? I I think if it's big, everybody should be doing great and frankly that's what we've been seeing right now, but I do think there was an opportunity for AMD here to go from what's been you know, good results, but still you know, not where they could be to having a real inflection as as the MI450 and the Helios rack start starts to ramp into next year. >> So, as we see Intel and AMD compete on the on the server CPU side, Stacy, you're saying it doesn't really matter. Like there's enough demand at this point where all the boats will will rise. >> Well, so those comments I just made were on on the GPU side. On the CPU side, I mean demand is is so strong. Everybody's just shipping everything that they can possibly make. And you take Intel, for example. In Intel, by their own admission, their products right now are not are not as competitive as they want them to be. Um it doesn't matter. Like customers are buying them anyways. They had a couple quarters ago they they actually had oh, 200 basis points of margin upside because they sold previously written off product, stuff that they didn't think that anybody would want to buy, so they wrote them off. Customers said, "We don't care. We'll take them." That's That's how strong demand has been. And I would say AMD actually has products that people actually want to buy. So, [laughter] I'd expect that to be pretty good for them. >> What's your first question on the conference call? >> Uh I I think the big question is, you know, they said data center is going to accelerate into the back half. So, I mean trying to get some color around what that acceleration looks like. The the timing the real timing of the Helios ramp. I think they've kind of said maybe end of Q3, but what does that look like into Q4 and next year? Um you know, how much revenue they expect from Anthropic and what could that that add to the numbers next year? And for you, I'd also like to know about client, frankly. I mean we've been we've had client a little bit below like where the rest of the street is. I think I've been very nervous. In Intel kind of talked about um the their PC revenue is kind of taking a dive into the end of the year. And I would like to know the shape of that and how AMD feels about that. Although I I feel like data center is strong enough where people probably don't care as as much. But I would like to know.