Here's What's At Stake For Advanced Micro Devices As Its Analyst Day Approaches

Advanced Micro Devices, Inc. AMD's disappointing first-quarter report put the company in a position where it needs to win-over investors, at least according to BMO Capital Markets' Ambrish Srivastava.

Srivastava maintains an Outperform rating on AMD's stock with an unchanged $15 price target in a research report on Monday just one day ahead of the company's Financial Analyst Day presentation. The analyst is expecting management to be convincing in its pitch otherwise it risks losing bullish analysts — himself including.

What To Look For

Here are the five main points the analyst needs to see on Tuesday.

1. Execution: AMD needs to explain recent accounting changes relating to how it accounts for mask costs. Also important to touch on is the company's guidance on inventory levels, which fell short of expectations for two straight quarters while free cash flow fell "significantly" in the first quarter.

2. Operating Model: AMD should present its long-term financial model and provide OpEx/Free Cash Flow expectations for 2017.

3. Computing And Graphics: The analyst wants AMD to update its expectations for GPU in the data-center.

4. Enterprise, Embedded And Semi-Custom: AMD should provide an update on the timing of material revenue expectations for the Naples server CPU. Also, the company should provide details on the revenue opportunity for the semi-custom business.

5. Roadmap: Finally, AMD should provide an updated roadmap detailing product launches, especially relating to the timing of 7-nm products.