AMD Q1 2022 Results

Lisa Su, CEO, AMD

Scott Mlyn | CNBC

AMD reported its first-quarter results after the bell on Tuesday, beating analyst estimates for profit and revenue, pushing the stock up as much as 8% in extended trading.

Here’s how the chipmaker fared against Refinitiv consensus estimates in the quarter ending March:

  • PES: $1.13, adjusted, vs. $0.91 expected, up 117% year-over-year
  • Revenue: $5.89 billion, vs. $5.52 billion expected, up 71% year-over-year

AMD said it expects $6.5 billion in sales in the current quarter, ahead of analysts’ expectations of $6.38 billion.

AMD’s Tuesday results suggest the chipmaker is continuing to grow strongly, with sales growing 71% in the first quarter and each of its individual businesses growing double-digits in the quarter.

One of AMD’s strengths is its high-end server chip business, which primarily competes with Intel. Some data points show that AMD has taken market share from its rival as it tries to reclaim its manufacturing prowess.

Some analysts suggest PC sales could decline this year after two years of skyrocketing shipments as people needed laptops to work from home or go to school remotely. Some investors think the pandemic PC boom is over, but AMD, which supplies the processor at the heart of many laptops and desktops, isn’t feeling the decline.

“Although the PC market is experiencing some weakness after several quarters of near-record unit shipments, we remain focused on the premium, gaming and commercial segments of the market where we see strong growth opportunities and plan to continue to gain overall customer revenue share,” said AMD CEO Lisa Su, adding that AMD believes it has gained market share in PC chips for eight consecutive quarters.

PC sales are reported in AMD’s Computing and Graphics segment, which grew 33% year on year and 8% from the December quarter. AMD said the increase was due to both CPU and GPU sales, and that the average selling price of Ryzen processors increased during the quarter.

Cloud server sales are reported in AMD’s Embedded, Enterprise and Semi-custom segment, which grew 88% to $2.5 billion. AMD said the rise was due to higher sales of server processors as well as semi-custom sales, which are the chips that go to the heart of game consoles like the PlayStation 5.

Su said AMD’s semi-custom business saw “double-digit” year-over-year growth due to consumer demand for the Playstation 5, Xbox One and Steam Deck. Valve.

“Sales of this generation of game consoles continue to outpace all previous generations, and we expect 2022 to be a banner year for our semi-custom business,” Su said.

AMD stock has had a tough 2022, falling more than 39% so far, after a boom in 2021 when its sales rose 68% and its gross margin rose to 48%. Investors are turning away from semiconductor stocks amid heightened inflation risk.

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

AMD said it completed the acquisition of Xilinx in February. The deal was originally announced in 2020 with a price tag of $35 billion. AMD said its results included six weeks of revenue from the deal, and without Xilinx sales, revenue would have risen only 55% year-over-year to $5.3 billion.

AMD said it repurchased $1.9 billion of its stock during the quarter.

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