Jan 31 (Reuters) – U.S. chip maker Advanced Micro Devices Inc (AMD.O) on Tuesday posted revenue that beat Wall Street targets and stated it anticipated enterprise to enhance within the second half, enthusing buyers who noticed the corporate gaining on rival Intel.
Shares rose about 1.5% in after hours buying and selling. Although AMD’s forecast was behind expectations, it was not as weak as some fearful. Recent earnings stories for each Intel and AMD present the as soon as quick rising knowledge heart enterprise shall be more difficult for all chip makers as firms regulate their spending.
“AMD remained resilient and even made positive aspects of their datacenter chips…towards Intel,” stated Wayne Lam analyst at CCS Insight.
Chief Executive Lisa Su stated she was assured AMD will maintain gaining market share this yr and that the second half can be stronger than the primary.
While Intel Corp. (INTC.O) nonetheless dominates the PC and server processing chip markets with a share exceeding 70%, that’s down from greater than 90% in 2017, in response to tech analysis agency IDC. A giant chunk of that share was taken by AMD.
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AMD’s Data Center section revenue grew 42% to $1.7 billion in the course of the fourth quarter, offsetting a 51% drop in revenue of the consumer section that features PCs at $903 million.
PC shipments fell 16.5% to 292.3 million models in 2022, in response to knowledge from analysis agency IDC.
Su stated that AMD was anticipating the PC market this yr to be down 10% and it could “proceed to ship under consumption within the first quarter to cut back downstream stock”.
“First quarter must be the underside for us in PCs after which develop from there into the second quarter after which into the second half,” Su stated on the earnings name.
The slumping PC enterprise pummeled Intel’s first-quarter outlook and Intel Chief Executive Pat Gelsinger stated he was seeing “a number of the largest stock corrections actually that we have ever seen within the business.”
“I believe we’ll nonetheless see ache throughout the business for not less than one other few quarters earlier than issues flip round,” stated Anshel Sag, analyst at Moor Insights & Strategy.
“We consider AMD’s outcomes proceed to point out softness throughout the PC and gaming markets,” stated Angelo Zino, analyst at CFRA Research. “We additionally count on revenue ranges in each segments to trough within the first half of this yr.”
AMD had already began under-shipping final yr in response to plummeting processor demand.
This decline led chipmakers to slash revenue forecasts, triggering a sell-off in chip shares. AMD’s inventory fell 55% final yr, underperforming the Philadelphia SE Semiconductor index (.SOX) throughout an business downturn
Adjusted fourth-quarter revenue rose 16% to $5.60 billion. Analysts on common have been anticipating revenue of $5.50 billion, in response to Refinitiv knowledge.
The firm forecast current-quarter revenue of $5.3 billion, plus or minus $300 million. Analysts on common anticipated revenue of $5.48 billion, in response to Refinitiv knowledge.
Reporting by Chavi Mehta in Bengaluru Jane Lanhee Lee in Oakland, Calif; Editing by Anil D’Silva, Jonathan Oatis and David Gregorio
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