AMD — Equity Research & Investment Analysis

Team: Robin Larsson (Lead Analyst), Rasmus Bogren, Lennart Erdmann, Valeria Vitale

AMD was selected as the first investment candidate of the university investment club cycle. The team produced a full equity research report and formal presentation.

Company Overview

AMD is a US-based semiconductor company (founded 1969) specialising in CPUs and GPUs for PCs, gaming consoles, cloud computing, and high-performance computing (HPC). At time of analysis, revenue was split across two segments: Computing & Graphics (56%) and Enterprise, Embedded & Semicustom (44%), with Q3 2021 combined revenue of ~$4.3B.

Market Analysis

• GPU market projected to grow at 33% CAGR to 2027; CPU market at 4.1% CAGR to 2027
• AMD held 38% CPU market share (vs. Intel 62%) and 19% discrete GPU share (vs. Nvidia 81%)
• Semiconductor shortage (2020–) created a supply constraint that also raised the barrier to entry for new competitors — net positive for incumbents
• Key demand tailwinds: crypto mining, autonomous vehicles, gaming, Metaverse, and data centres

Company Analysis

• CEO Dr. Lisa Su (since 2014): share price +1,300% under her leadership; named one of Barron's Top 50 CEOs
• Major institutional holders: Vanguard (7.68%), BlackRock (4.48%), SSgA (3.74%)
• Exclusive CPU/GPU supplier for both Sony PlayStation 5 and Microsoft Xbox Series X/S — long-term, locked-in console revenue
• Described as selling "shovels in the gold rush": regardless of which high-tech trend wins, they all require AMD's computing power

Financial Analysis

• Revenue grew 45% YoY from 2019 to 2020; steady growth trajectory with reinvestment focus (no dividends paid)
• Debt/Equity ratio of 0.04 — the lowest in the peer group; significant headroom for future acquisitions or R&D spending
• Strong ROE and ROI relative to peers, demonstrating efficient capital deployment despite lower absolute earnings margins
• Comparable company analysis vs. Nvidia, Qualcomm, Intel, and ADI: AMD appeared fairly valued to undervalued at current price relative to peers

Technical Analysis

• Strong uptrend with price trading above both the 50 and 100 SMA
• RSI normalising from overbought territory — classic bull consolidation setup after an Omicron-driven pullback
• MACD showing a slight bearish crossover post run-up (considered a short-term signal, not a trend reversal)
• Prior breakout from a pennant formation added ~50 USD to price
• Technical price target: 200 USD if a new pennant forms and breaks to the upside
• AMD outperformed the S&P 500 by ~40% year-to-date at time of analysis

Conclusion: BUY

AMD is well positioned to capitalise on structural semiconductor demand growth. A capable CEO, the lowest debt levels in the peer group, growing market share in both CPUs and GPUs, strong institutional ownership, and an attractive relative valuation made AMD a high-conviction long-term buy recommendation.