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AMD gross sales bounce 71%, shrugging off considerations about PC slowdown

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

Here’s how the chipmaker did versus Refinitiv consensus estimates within the quarter ending March:

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

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

AMD’s outcomes on Tuesday counsel that the chipmaker remains to be rising fiercely, with 71% gross sales development within the first quarter, and each one among its particular person strains of enterprise rising by double digits throughout the quarter.

Lisa Su, CEO, AMD

Scott Mlyn | CNBC

One spotlight for AMD is its high-end server chip enterprise, which primarily competes with Intel. Some information factors present that AMD has taken market share from its rival whereas it tries to get its manufacturing prowess again.

Some analysts counsel that PC gross sales might shrink this yr after two years the place shipments exploded as individuals wanted laptops to work at home or go to highschool remotely. Some buyers imagine that the pandemic PC increase is over, however AMD, which provides the processor on the coronary heart of many laptops and desktops, is not feeling the decline.

“Although the PC market is experiencing some softness coming off multiple quarters of near-record unit shipments, our focus remains on the premium, gaming and commercial portions of the market where we see strong growth opportunities and expect to continue gaining overall client revenue share,” AMD CEO Lisa Su mentioned, including that AMD believes that it has gained market share in PC chips for eight straight quarters.

PC gross sales are reported in AMD’s computing and graphics phase, which rose 33% on an annual foundation and was 8% increased than the December quarter. AMD mentioned that the rise was pushed each by central processors and graphic processor gross sales, and that the common gross sales value for Ryzen processors rose throughout the quarter.

Cloud server gross sales are reported in AMD’s Embedded, Enterprise, and Semi-custom phase, which elevated 88% to $2.5 billion. AMD mentioned the rise was pushed by increased server processor gross sales in addition to semi-custom gross sales, that are the chips that go into the guts of sport consoles just like the PlayStation 5.

Su mentioned that AMD’s semi-custom enterprise grew by “double-digits” on a year-over-year foundation because of client demand for the Playstation 5, Xbox One, and Valve’s Steam Deck.

“Sales for this game console generation continue to outpace all prior generations, and we expect 2022 to be a record year for our semi-custom business,” Su mentioned.

AMD inventory has had a tough 2022, dropping over 39% up to now, after a blowout 2021 when its gross sales elevated 68% and gross margin grew to 48%. Investors are shying away from semiconductor shares within the face of elevated inflation danger.

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

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

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

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