AMD Sales Jump 71%, Shrugging Off Concerns About PC Slowdown

AMD reported first-quarter earnings after the bell on Tuesday, beating analyst estimates for earnings and income, sending the top off 8% in prolonged buying and selling.

Here is how the chipmaker anticipated the Refinitiv consensus for the quarter ended March:

  • eps: $1.13, adjusted, versus $0.91 anticipated, 117% year-over-year
  • Income: $5.89 billion, versus $5.52 billion anticipated, up 71% year-over-year

AMD mentioned it anticipated gross sales of $6.5 billion within the present quarter, forward of analyst expectations of $6.38 billion.

AMD’s outcomes on Tuesday confirmed that the chipmaker continues to be rising quickly, with 71% gross sales progress within the first quarter, and each single particular person line of enterprise rising by double digits through the quarter.

Lisa Su, CEO, AMD

Scott Millin | CNBC

A spotlight for AMD is its high-end server chip enterprise, which primarily competes with Intel. Some information factors recommend that AMD has taken market share from its rival whereas making an attempt to regain its manufacturing prowess.

Some analysts recommend that PC gross sales this yr may decline after two years the place shipments exploded as folks wanted laptops to do business from home or go to high school remotely. Some traders imagine the pandemic PC increase is over, however AMD, which provides the processors on the coronary heart of many laptops and desktops, is not feeling the decline.

“Whereas the PC market has been experiencing some moderation from a number of quarters of near-record unit shipments, our focus stays on the premium, gaming and industrial segments of the market the place we see sturdy progress alternatives and the potential to attain general buyer income share. Hopefully, AMD’s CEO Lisa Su mentioned, AMD believes it has achieved market share in PC chips for eight consecutive quarters.

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AMD’s computing and graphics section reported PC gross sales, which grew 33% yr over yr and had been up 8% in comparison with the December quarter. AMD mentioned the expansion was pushed by each central processor and graphic processor gross sales, and elevated common promoting costs for Ryzen processors through the quarter.

AMD’s Embedded, Enterprise and Semi-custom segments are reported to have cloud server gross sales, up 88% to $2.5 billion. AMD mentioned the expansion was pushed by greater server processor gross sales in addition to semi-custom gross sales, that are the chips that go on the coronary heart of recreation consoles just like the PlayStation 5.

Su mentioned that AMD’s semi-custom enterprise grew “double-digit” on a year-over-year foundation as a result of shopper demand for Ps 5, Xbox One and Valve’s Steam decks.

“Gross sales for this recreation console era proceed to outpace all earlier generations, and we count on 2022 to be a report yr for our semi-custom enterprise,” Su mentioned.

AMD inventory has been round for 2022, after falling greater than 39%, adopted by 2021 when its gross sales soared to 68% and gross margins to 48%. Traders are shying away from semiconductor shares as a result of rising inflation danger.

Final week, Intel gave a disappointing forecast for the June quarter, citing weak PC demand and macroeconomic challenges.

AMD mentioned it accomplished its acquisition of Xilinx in February. The deal was initially introduced in 2020 with a $35 billion price ticket. AMD mentioned its outcomes included six weeks of income from the deal, and that with out the sale of Xilinx, income would have grown solely 55% year-over-year to $5.3 billion.

AMD mentioned it repurchased $1.9 billion of its inventory through the quarter.

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