AMD(US:AMD) The Motley Fool·2025-02-12 23:30Core Insights - AMD has experienced a significant decline, losing nearly 40% of its value over the past year due to sluggish sales in gaming chips, despite stronger performance in PC and data center segments [1] - AMD's data center revenue grew 69% year-over-year in Q4 2024, but this was a slowdown from previous quarters, raising concerns about its competitiveness against Nvidia in the AI market [2] - Analysts project AMD's revenue and adjusted EPS to grow by 24% and 43% respectively in 2025, but these estimates may decrease if the data center business continues to cool [3] - Investors are advised to consider more balanced chipmakers like Broadcom and TSMC, which do not directly compete with Nvidia [4] Broadcom - Broadcom operates in two main sectors: chipmaking and infrastructure software, significantly expanding through acquisitions, including VMware in 2023 [5] - The AI market's growth is driving demand for Broadcom's networking chips and custom XPU accelerators, with AI-oriented chip sales surging 220% to $12.2 billion in fiscal 2024, accounting for 41% of semiconductor revenue [6][7] - Analysts expect Broadcom's revenue to grow at a CAGR of 17% from fiscal 2024 to 2027, with EPS rising at a CAGR of 75%, justifying its higher valuation of 43 times next year's earnings [8] Taiwan Semiconductor Manufacturing (TSMC) - TSMC is the largest and most advanced contract chipmaker, producing chips for leading fabless companies like AMD and Nvidia [9] - TSMC's HPC revenue surged 58% in 2024, making up 51% of its total revenue, while smartphone chip revenue rose 23% [10] - TSMC plans to enhance its production of 2 nm chips and expand overseas to mitigate geopolitical risks, with revenue and EPS expected to grow at a CAGR of 23% and 26% from 2024 to 2026 [11][12]