This Feb 4, 2022, illustration shows microchips made by AMD Malaysia and Foxconn in Washington, DC. (DANIEL SLIM / AFP)
Advanced Micro Devices Inc on Tuesday forecast stronger-than-expected full year and second-quarter revenue, with the data center boom boosting demand for its chips, and its shares rose in after-hours trade.
"Each of our businesses grew by a significant double digit percentage year-over-year, led by EPYC server processor revenue more than doubling for the third straight quarter," said AMD chief executive Lisa Su in its statement.
Worldwide spending on cloud infrastructure services jumped 34 percent to $55.9 billion in the first quarter, according to data from research firm Canalys, highlighting huge opportunities for companies supplying chips and other hardware to the industry
The strong outlook and earnings pushed up AMD shares by 3 percent in after-hours trading.
Worldwide spending on cloud infrastructure services jumped 34 percent to $55.9 billion in the first quarter, according to data from research firm Canalys, highlighting huge opportunities for companies supplying chips and other hardware to the industry.
Still Summit Insights Group analyst Kinngai Chan called AMD's second quarter outlook "aggressive" and added there was more downside risk in the PC and graphic card markets.
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Graphic card prices have been falling in recent weeks as demand for consumer products that use them have been softening with inflation concerns.
On the earnings call with analysts, Su said AMD expected the total PC market to fall by a high single digit this year. "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," she said.
The company said it expects revenue of about $6.5 billion, plus or minus $200 million for the current quarter. Analysts on average were expecting revenue of $6.38 billion, according to Refinitiv data. For the full year it forecast $26.3 billion, up about 60 percent, and ahead of analysts’ estimates of $25.145 billion according to Refinitiv IBES data.
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AMD's first-quarter revenue came in at $5.89 billion, above analysts' average estimate of $5.52 billion, according to Refinitiv IBES data. On an adjusted basis, AMD earned $1.13 per share, during the quarter, compared to Street's estimates of 91 cents per share, according to Refinitiv data.
AMD finalized the acquisition of Xilinx Inc in mid-February. The earnings and forecasts include its results.