AMD's annual revenue could exceed $10 billion by 2023

A recent review of Form 13F allowed to find outthat in the third quarter, institutional investors showed increased interest in "long positions" in AMD shares. This suggests that professional investors are convinced of the company's ability to increase revenue and profitability relative to current levels.

Some experts went even further, and on the pages of the resource Seeking Alpha described a hypothetical situation in which AMD will be able to increase annual revenue to more than $10 billion.

At the end of the current year, AMD plans to earn about $6,7 billion. Almost a third of this amount will come in the fourth quarter, and the growing sales of consumer and server processors will be the main locomotive of quarterly revenue. To increase revenue in the coming years, AMD will need to strengthen its position in key markets, pushing competitors in the face of Intel and NVIDIA.

Rosenblatt Securities estimates that the company will have to capture at least 25% of the desktop and server market to increase its annual revenue to $15 billion. In the server segment, achieving this goal does not seem so fantastic, but in the consumer segment it is even more realistic. In the desktop processor segment, AMD already controls 18% of the market; in the notebook segment, its share does not exceed 15%. Most industry analysts agree that AMD will generate annual revenues of more than $10 billion for the first time by the end of 2023.

Calculations show that the cost-to-revenue ratio remains a deterrent to AMD's business expansion. The company's management is interested in the fact that the share of expenses does not exceed 30% of revenue. Roughly speaking, now the company is able to spend no more than $2 billion annually.

But if its revenue reaches $ 15 billion, then AMD will even allow itself to slightly reduce the share of operating expenses, to about 25% of revenue. At the same time, it will have a budget of approximately $3,75 billion, which is significantly higher than the current level of spending.

AMD is also interested in increasing the profit margin - now this figure is close to 40%, but with a favorable set of circumstances, it can be raised to 55%, analysts say. Thus, when gaining control over a quarter of the consumer and server markets, AMD will receive additional opportunities for development.

Source: 3dnews.ru