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AMD Investors Pull Out After Q2 Earnings

AMD Investors Pull Out After Q2 Earnings

4 minutes of reading

Actions of Advanced Micro Devices, Inc. (NASDAQ:AMD) suffered an aftermarket pullback on Tuesday after its second-quarter results beat analysts’ estimates. However, the company issued a third-quarter earnings forecast below the Wall Street consensus.

AMD has stated that it has seen strength in the ‘Date center’ and ‘Embedded’ segments, as well as slowing growth in other segments. The company has kept its forecasts for the whole year.

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AMD Q2 key figures

Read Profit AMD’s non-GAAP second-quarter earnings were $1.05, above the consensus estimate of $1.03 and EPS of 63 cents a year ago.

For its part, in previous quarterthe balance was $1.13 per share.

Revenue rose 70% year-over-year to $6.55 billion, slightly beating consensus of $6.53 billion. In April, AMD posted revenue of $6.5 billion plus or minus $200 million.

The second quarter marked the first full quarter with the added contribution from Xilinx, which was acquired in February.

AMD’s gross margin fell 140 basis points to 46%, primarily due to amortization of intangible assets related to the Xilinx acquisition. Non-GAAP gross margin increased by 640 basis points year-over-year to 54%.

We have posted our eighth consecutive quarter of record revenues based on our strong execution and expansion of our product portfolio. Lisa SuCEO of AMD.

The company ended the quarter with $6 billion in cash, cash equivalents and short-term investments.

your opponent Intel Corporation (NASDAQ:INTC) published last week weak performance in the second quarter, and Hans Mosesmann, an analyst at Rosenblatt Securities, blamed the shortage on “a rapid decline in economic activity, corrections in OEM inventories and a general lack of execution in product design and distributed computing and artificial intelligence (DCAI). )”.

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AMD performance by category

Lisa Su said all parts of the company had seen “significant” growth over the year, with the best performing categories being “Date center” and “Embedded products”.

Revenue from the ‘data center’ segment grew 83% year-over-year to $1.5 billion, thanks to strong sales of EPYC processors. The Xilinx acquisition, which closed in February, benefited Embedded segment revenue, which rose 2,228% to $1.3 billion.

Revenue growth for the ‘Consumer’ and ‘Gaming’ segments declined to 25% and 32%, respectively.

AMD prediction

AMD has indicated that it expects continued growth in the second half of the year, supported by next-generation 5nm product delivery and a diversified business model.

AMD expects third-quarter revenue to be $6.7 billion, plus or minus $200 million, which would represent 55% year-over-year growth. Consensus estimates point to non-GAAP earnings of $1.09 on revenue of $6.82 billion. The company is leaning toward a 54% non-GAAP gross margin.

The company maintains its full-year revenue estimate of $26.3 billion and a non-GAAP margin estimate of 54%. For the full year, analysts on average are estimating GAAP and revenue of $4,380 million and $26,180 million, respectively.

Earnings Call Highlights: Rosenblatt’s Mosesmann has stated that he is awaiting AMD’s comments on:

  • New generation of processors: Ryzen 7000 based on Zen 4 and EPYC 4
  • Next Generation RDNA/CDNA GPU Roadmap
  • The first synergies that Xilinx FPGAs bring to broader target markets such as telecom, data center, automotive and industrial
  • AMD availability status

AMD price movement

In response to the quarterly results, AMD shares fell 4.62% to $94.70 after hours, according to data from Benzinga Pro.

AMD has pulled back in line with tech stocks and is already down 32.7% year-to-date. This compares to a decrease of 12.9% that occurred SPDR S&P 500 ETF Trust (NYSE: SPY ) and the 20.5% decline experienced Invesco QQQ Trust (NASDAQ:QQQ).

Analysts’ average price target for AMD stock is $127.13, according to data compiled by TipRanks. This would mean that the shares had a margin of 31%.

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