Advanced Micro Devices’ high-end server chip business is booming and taking a share from Intel. This is the key to remember
latest quarterly results published on Tuesday. The chipmaker’s stock jumped on the news late in the session.
Chipmaker AMD said revenue from its EPYC server processor business more than doubled in the March quarter. In comparison, Intel last week (ticker:
) reported 22% year-over-year growth for its data center server unit for the same period.
AMD (AMD) also reported adjusted earnings per share of $1.13, versus the Wall Street consensus estimate of 91 cents, according to FactSet. Revenue reached $5.9 billion, which was above analysts’ expectations of $5.01 billion. The figures include the results of AMD’s acquisition of Xilinx, which closed on February 14. It is unclear whether analysts’ estimates have been properly adjusted for the deal. AMD said revenue for the quarter excluding Xilinx was $5.3 billion.
AMD shares rose 6% after the release.
During the conference call, the company’s management admitted that the overall PC market “is experiencing some softness.” But AMD said it was less affected as the company focused more on the stronger commercial and high-end part of the PC business. Additionally, management said its business outlook for its server chips and game console chip units has strengthened for the remainder of the year.
Analysts have become more cautious on AMD shares as the PC market weakens. In April, research firm IDC said global personal computer shipments fell 5% year-over-year in the March quarter due to weaker consumer and business demand. supply chain issues.
Last month, Wedbush analyst Matt Bryson reiterated an outperform rating and $165 price target for the company. “Like much of our tech universe, AMD has been under pressure since the start of the year with slowing PC sales,” he wrote. “Our conversations suggest that AMD is still working to meet customer demand for EPYC [server] rooms.”
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