It was interesting to see you and Neolib on the very opposite predictions for the quarter, and also differing in opinion about the Q2 outlook, albeit in the other direction.
> They need to up YOY guidance [from 37%] to 45%+.
Considering Neolib's analysis and the data in the quarter, I think that is highly likely there will be a raise. As Neolib mentioned, they started low last year and ended up much much better (actually lower than Neolib claimed, they started at 25%, then down to 21% at the height of Covid-19 uncertainty, then up to 31%, and then 41%, before ending at 45% full-year growth).
Thing is, analysts' expectations are low. I picked Zacks' highest estimate for the Q2 outlook, $3.40B, and ended up at the bottom of our contest entries in that category! Even for the current quarter, the whisper number, at $0.47, expects a seasonal decline, which as Neolib points out does not make sense, even with the midpoint of guidance and the low 37% full-year guidance.
All that said, I think stock sentiment will be muted until the Xilinx deal is settled. As for any dilution of the stock, mentioned by Neolib, there will be no dilution due to Xilinx in this quarter, but there was a warning statement about the outstanding warrants causing dilution and stock price uncertainty in the quarter.
Personally, I think long-term is more important. How will AMD+Xilinx be viewed at the end of what seems to become a record year for AMD in all categories? Will it get some of that Nvidia awe, when the combined earnings power and product capabilities are presented? On the revenue curve, AMD is now where Nvidia was just a couple of years ago, with EPYC data centre revenue just starting to snowball and become material, and with commercial and consumer PC and console products hitting new record heights. Meanwhile GPU isn't doing badly either, with a great product range from top to bottom, booming gaming markets, and a resurgence in crypto-currency mining, while Instinct in the data centre has a lot of promise.
| AMD+Xilinx longterm prospects (3-5 years) | Revenue | Gross margin | EPS | Market cap. | Stock price | Likelihood | | Doom-and-gloom: Falters and fades away, overtaken by competitors | <$8B | <40% | <$0 | <$40B | <$25 | <1% | | Pessimistic: Underdog, fighting for profitability, precarious future | $8-10B | 40-45% | $0-1 | $40B-80B | $25-50 | 4% | | Stable: Respected competitor, solid profitability, competitive pressure | $10B-20B | 45-50% | $1-4 | $80B-160B | $50-100 | 25% | | Optimistic: Matches competitors, high margins and solid growth | $20B-40B | 50-55% | $4-8 | $160B-320B | $100-200 | 45% | | Pie-in-the-sky: Overtakes competitors, leading innovation and markets | $40B+ | 55%+ | $8+ | $320B+ | $200+ | 25% | |
