JPMorgan: AMD's last quarter performance and guidance were mixed; maintain "Neutral" rating

JPMorgan issued a research report stating that AMD’s performance and guidance last quarter were mixed. Revenue in Q4 last year was solidly above expectations, mainly due to an unexpected income of nearly $400 million. Although adjusted gross margin slightly exceeded expectations, this was fully offset by operating expenses about $200 million higher than guidance, marking that AMD’s expenses have exceeded expectations for several consecutive quarters. Therefore, despite Q1 guidance also being better than expected, AMD’s ability to generate operating leverage remains questionable, which could be a short-term pressure on the stock until the company can deliver convincing results (most likely in the second half of this year), especially as the MI450/Helios chips are set for large-scale production later this year, potentially facing a downward risk to gross margins. Regarding supply chain capabilities, the bank believes AMD appears to be well prepared for the large-scale deployment of MI450 later this year and will continue to expand supply chain investments into 2026 to support subsequent deployment growth. The bank remains cautious on AMD, as the current valuation already fully reflects its value, maintaining a target price of $270 and a “Neutral” rating. (Science and Technology Innovation Board Daily)