Xiaomo: AMD's last quarter performance and guidance are mixed, maintaining a "neutral" rating.

J.P. Morgan released a research report stating that AMD's performance and guidance in the last quarter were mixed. The revenue in the fourth quarter of last year exceeded expectations stably, primarily due to unexpected revenue of nearly $400 million. Although the adjusted gross margin was slightly better than expected, it was completely offset by operating expenses higher than guidance by about $200 million, indicating that AMD's expenses have exceeded expectations for several consecutive quarters. Therefore, although the guidance for the first quarter is also better than expected, AMD's ability to generate operating leverage is still questionable, which may become a short-term pressure on the stock price until the company can provide convincing performance evidence, especially since the MI450/Helios chip is expected to be mass-produced later this year, posing a downside risk to the gross margin. In terms of supply chain capabilities, the bank believes that AMD seems to be well prepared for the large-scale deployment of MI450 later this year and will continue to expand supply chain investment in 2026 to cope with subsequent deployment growth. The bank remains neutral on AMD as the current valuation of the company already reflects its value, maintaining a target price of $270 and a "neutral" rating.