AMD Rides on Solid Adoption of New EPYC CPUs, Pensando DPUs
Advanced Micro Devices AMD continues to strengthen its footprint in the enterprise data center arena by leveraging the power of fourth-generation EPYC CPUs and Pensando data processing units (DPUs).
Its shares have returned 67.1% year to date, outperforming the Zacks Computer & Technology sector’s growth of 32.4%, thanks to a solid portfolio.
At the latest VMware Explore 2023, AMD demonstrated that the combination of a fourth-generation EPYC 9654 CPU and a Pensando DPU delivers a staggering 3.3 times boost in Redis application performance and a 1.75 times surge in aggregate network throughput compared to a fourth-generation EPYC system equipped with standard NICs.
Moreover, servers with 2P fourth-generation EPYC 9654 CPUs use up to 35% fewer servers in a setup running 2000 virtual machines (VMs) compared to 2P Xeon 8490H-based servers from Intel INTC.
The combination of EPYC CPUs, Pensando DPUs and adaptive computing products is helping AMD to solidify its position as a go-to solution for enhanced virtualized environments. The company’s ongoing collaboration with VMware VMW is helping customers to become more efficient and agile in their digital transformation journey.
Advanced Micro Devices, Inc. Price and Consensus
Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote
AMD, along with its partners, continues to offer solutions that enable greater data center consolidation. The company is benefiting from the impressive performance of EPYC CPUs, delivering a 1.7 times performance increase in combination with 2P EPYC 9654 CPUs compared to 2P Intel Xeon 8490H-based servers running VMmark.
As data center applications scale in complexity, AMD Pensando DPUs emerge as the ideal solution for offloading infrastructure services from CPUs, freeing up valuable work cycles. VMware vSphere 8-powered systems, fueled by EPYC CPUs and Pensando DPUs, provide solid performance, efficiency and flexibility for running an array of business-critical workloads.
AMD's data center innovations, alongside VMware-based systems, empower IT leaders to elevate the management and security of enterprise applications, ushering in a new era of transformative digital progress.
Strong Partner Base Aids AMD
AMD is benefiting from a strong partner base that includes Microsoft, Amazon Web Services, Alibaba, and Oracle. These cloud providers deployed Genoa in the second quarter of 2023.
Moreover, the growing adoption of fourth-generation EPYC by enterprises brightens prospects. In second-quarter 2023, the adoption of fourth-generation EPYC CPU accelerated with revenues, almost doubling on a sequential basis as cloud providers expanded deployments to support their internal infrastructure, as well as public instance offerings.
Currently, there are more than 670 AMD-powered cloud instances publicly available and this number is expected to grow 30% to 900 by the end of 2023, primarily due to the adoption of Genoa.
Moreover, the availability of Bergamo is crucial, as several server providers like Dell, HPE, Lenovo and Supermicro are set to launch their new Bergamo-based platforms in the third quarter.
These factors are expected to boost AMD’s prospects in the near term. The company expects third-quarter 2023 revenues to be $5.7 billion (+/-$300 million), which indicates year-over-year growth of 2.5% and 6.5% sequentially.
AMD also expects to witness growth in Client segments, partially offset by a decline in the Gaming and Embedded segments.
Sequentially, Client and Data Center segment revenues are expected to grow on a double-digit basis. However, Gaming and Embedded segment revenues are expected to decline.
Zacks Rank & A Key Stock to Consider
AMD currently has a Zacks Rank #3 (Hold).
Allegro MicroSystems ALGM is a better-ranked stock in the broader computer & technology sector, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Allegro MicroSystems’ first-quarter fiscal 2024 earnings is pegged at 37 cents per share, up 23.3% over the past 30 days and indicating 19.35% year-over-year growth.
Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.
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