KeyBanc analyst John Vinh maintained an Overweight rating on $Advanced Micro Devices (AMD.US)$, with a price target of $270.
The analyst said AMD grew modestly in February, as Genoa's growth remained strong.
AMD processor instances were +1% month-on-month (M/M), +24% Y/Y, compared with January (+1% M/M,+35% Y/Y).
Genoa instance growth remained strong (+19% M/M), led by $Amazon (AMZN.US)$ AWS, after growing +13% M/M in January. Rome was +1% M/M,+14% Y/Y.
AMD's price target is $270, based on 30x Vinh's 2025 EPS estimate of $9.05. AMD is trading at 21x Vinh's 2025 EPS estimate and 38x the 2025 consensus EPS estimate compared to its peers, trading at an average consensus 2025E P/E multiple of 34x.
Vinh's February results showed a continued decline in traditional server demand and China, as cloud instances saw a slight decrease of 1% M/M, a downturn from January's 1% growth M/M.
This overall decline was marked by $Alibaba (BABA.US)$ significant 11% reduction in M/M, underscoring the weakness in China's cloud sector.
On a company basis, $NVIDIA (NVDA.US)$ and $Arm Holdings (ARM.US)$ remained stable M/M, and $Intel (INTC.US)$ experienced a 1% decline M/M.
In contrast, Intel's Sapphire Rapids instances slowed to 2% M/M growth following a significant 50% M/M surge in January.
Nvidia's GPU growth remained stagnant M/M, mirroring its January performance, with U.S. cloud service providers (CSPs) allocating capital expenditure towards internal generative AI workloads.
ARM's server growth was flat m/m versus a slight 1% M/M increase in January.
Based on the latest cloud tracker data, these findings suggest a moderately positive outlook for AMD and a neutral impact on ARM, Intel, and Nvidia.
Investors can gain exposure to AMD via $AOT GROWTH AND INNOVATION ETF (AOTG.US)$ and $INVESCO PHLX SEMICONDUCTOR ETF (SOXQ.US)$.
