Artificial intelligence (AI) is not only transforming the productivity but also influencing the society in general. Two of the AI companies to invest in, keeping in view the future developments are
Advanced Micro Devices Inc (NASDAQ: AMD)
Advanced Micro Devices Inc, one of the high growth stocks reported strong Q3 2024 financial results, with revenue reaching $6.8 billion, a 50% gross margin, $724 million in operating income, and $771 million in net income. On a non-GAAP basis, gross margin was 54%, with operating income of $1.7 billion and net income of $1.5 billion, delivering diluted EPS of $0.92. This performance, driven by record revenue across Data Center and Client segments, reflects robust demand for EPYC and Instinct data center products and Ryzen PC processors. The company foresees significant growth across its data center, client, and embedded businesses, positioning it to meet the rising demand for compute power.
AMD's Data Center segment reached record quarterly revenue of $3.5 billion, marking a 122% year-over-year increase and 25% sequential growth. The Client segment reported revenue of $1.9 billion, up 29% year-over-year and 26% sequentially, bolstered by high demand for AMD’s new Zen 5 Ryzen processors. However, the Gaming segment posted $462 million in revenue, a 69% year-over-year and 29% sequential decline, largely due to lower semi-custom revenue. The Embedded segment recorded $927 million in revenue, down 25% year-over-year as inventory levels normalized but up 8% sequentially due to demand improvement across several end markets.
Looking forward, AMD projects Q4 2024 revenue at approximately $7.5 billion, plus or minus $300 million. At the midpoint, this outlook represents a year-over-year growth of 22% and sequential growth of 10%, with a non-GAAP gross margin forecasted around 54%. Key growth drivers include new product launches that enhance AMD’s competitive positioning. In the Data Center segment, AMD introduced the EPYC 9005 Series processors, offering market-leading performance and energy efficiency, which could drive future revenue. The Client segment saw the release of Ryzen AI PRO 300 Series mobile processors, which support next-generation AI-enabled PCs and offer extended battery life, targeting the enterprise market. The Gaming segment also introduced updates to AMD Software: Adrenaline Edition, enhancing PC performance and gaming experiences.
AMD, with its AI technology is on track to achieve record annual revenue for 2024, driven by strong growth in the Data Center and Client segments. With substantial product innovation and expansion into key growth areas, AMD appears well-positioned for continued performance gains into 2025.
Taiwan Semiconductor Manufacturing Company Limited (NYSE: TSM)
Taiwan Semiconductor Manufacturing Company Limited during the third quarter of 2024 posted solid business growth. The company has witnessed an increase of around 39% revenue as compared to the same period last year. Both profits and net income as well as EPS have grown more than 50%. Revenues are growing over quarters by 12.8%, while net income grew by 31.2%. The company's gross margin is up at 57.8%, which reflects the firm demand for its advanced semiconductor technologies such as 3nm and 5nm chips, highly sought after in smartphones and artificial intelligence applications.
TSMC's advanced chip technologies, which include 3nm, 5nm, and 7nm, provided 69% of total wafer sales in Q3. The 3nm chips for high-performance devices accounted for a solid 20% of wafer sales. The company wants to keep investing substantially in R&D and in building capacity to support growing demand, especially in AI and smartphone markets. In 2024, TSMC will expend above $30 billion in capital investments, most of which will go toward advanced process technologies.
TSMC, one of the best AI stocks is expanding its manufacturing footprint in several regions. In Arizona, the first of three planned fabs has entered early production, using 4nm technology, with full-scale production expected to start in early 2025. The company is also building more fabs in Japan and Europe, with a new facility in Dresden, Germany, focused on automotive and industrial chips. These moves receive strong support from the central government in each region; TSMC will intend to manufacture the same top-quality goods as it currently does in Taiwan.
TSMC is expecting very strong performance in the fourth quarter of 2024. Gross margins are expected to remain strong, between 57% and 59%, while operating margins should be between 46.5% and 48.5%. TSMC remains confident in its ability to meet the growing demand for advanced semiconductor technologies, especially in AI-driven markets. Recent major events include an expanded partnership with Amkor for advanced packaging in Arizona, and the groundbreaking of the Dresden fab in Germany, demonstrating TSMC’s ongoing global investment and leadership in the semiconductor industry.
(Source: Company’s Report)
Veye Pty Ltd(ABN 58 623 120 865), holds (AFSL No. 523157 ). All information provided by Veye Pty Ltd through its website, reports, and newsletters is general financial product advice only and should not be considered a personal recommendation to buy or sell any asset or security. Before acting on the advice, you should consider whether it’s appropriate to you, in light of your objectives, financial situation, or needs. You should look at the Product Disclosure Statement or other offer document associated with the security or product before making a decision on acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Any recommendation contained herein may not be suitable for all investors as it does not take into account your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure accuracy of the content and that the information is gathered and processed from reliable resources, we strongly recommend that you seek professional advice from your financial advisor or stockbroker before making any investment decision based on any of our recommendations. All the information we share represents our views on the date of publishing as stocks are subject to real time changes and therefore may change without notice. Please remember that investments can go up and down and past performance is not necessarily indicative of future returns. We request our readers not to interpret our reports as direct recommendations. To the extent permitted by law, Veye Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss, or data corruption) (as mentioned on the website www.veye.com.au), and confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report. Veye Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services.