As I said, I am not good at valuation. I have seen various sites give forward pe calculation for amd at 18 - 37.
I see the above as estimation based on past. Without considering future new market potential just grabbing intel DC market share. say yearly DC revenue of 6B$. This is DC CPU alone. Now add AI product sales to the mix. How?
AMD showed Current oppurtunity as 25B$ dollars in 2023 and in 5 years opportunity at conservative at 80B$ to 150B$ at growth rate of 50% each year (as was mentioned by amd ceo (https://images.anandtech.com/doci/18916/42300421.jpg) . Yeah they took the aggressive estimate. But that is what nvidia earnings are pointing to…next quarter guidance is 65% up YoY sales.
Now, considering instinct processors ramp and supply is starting this year end. Next year oppurtunity is 36B$. Say even 10% sales lands with amd next year. We are looking at 4B$ sales.
This is a big jump for DC revenue currently standing at 6B$ annually. Not to mention ceo has said double digit growth this year. Considering how strong AMD’s DC CPU products are this year and next year, we can say 6B$ is conservative without including DC AI.
So where am I going with this? I am fine if AMD can get 15-20% of AI DC market by 2025, that would be amazing.15-20% DC AI market of potentially 50B$ market in 2025 is pretty good for AMD. You can make your valuations on top of this number.
We will have clarity of AI DC AMD product sales by Q42023. But every single nvidia customer is looking for alternatives. The margins are 70-80%. msft/amazon/meta/google - all are potential customers for MI300.
Regarding AMD DC outlook (on top of conservative 6B$ estimate), look at what AMD is offering in DC CPU. I will not be surprised 40% DCCPU market share by 2024 end. They are bringing the fight to ARM Collective’s cloud specific offerings while thumping intel. Meta is already a customer.
I would love to hear your valuation based on all this I wrote down. Some more non amatuerish valuation would help