Semi-Custom & EPYC Demand to Aid AMD This Earnings Season
Advanced Micro Devices’ AMD second-quarter 2022 results, to be reported on Aug 2, are expected to benefit from the ongoing momentum in EPYC processors and semi-custom products’ sales.
The addition of Xilinx is expected to have benefited top-line growth in the to-be-reported quarter. The Xilinx acquisition has expanded AMD’s technology and product port through the addition of FPGA and adaptive computing solutions.
However, higher investments by AMD in product development and platform, to retain its competitive stance, are likely to have affected profitability.
Click here to know how the company’s overall Q2 performance is expected to be.
Strong Demand for EPYC Processors: Key Catalyst
AMD has been clinching new deal wins for its EPYC processors from data centers, cloud and high-performance computing companies, including Amazon’s AMZN cloud arm, Amazon Web Services (AWS); Alphabet’s GOOGL Google Cloud and Microsoft’s MSFT Azure.
AWS expanded its EPYC-processor-based offerings with the general availability of general-purpose Amazon EC2 M6a instances.
Advanced Micro Devices, Inc. Revenue (TTM)
Advanced Micro Devices, Inc. revenue-ttm | Advanced Micro Devices, Inc. Quote
Moreover, Microsoft Azure is using third-generation AMD EPYC processors in its Dasv5 and Easv5 Azure Virtual Machines.
Google Cloud’s latest C2D virtual machine offering has been powered by AMD’s EPYC processors.
AMD’s increased server share is expected to have driven top-line growth in the to-be-reported quarter. AMD is riding on strong demand for both second and third-generation EPYC processors.
In first-quarter 2022, Enterprise, Embedded and Semi-Custom revenues of $2.2 billion were up 88% year over year and 13% sequentially.
The Zacks Consensus Estimate for the Enterprise, Embedded and Semi-Custom segment’s second-quarter revenues is pegged at $2.77 billion. The projection suggests an increase of 73.2% from the figure reported in the year-ago quarter.
Computing and Graphics Growth to Aid Top Line
AMD is expected to have witnessed steady demand for Ryzen processors in the second quarter due to the growing hybrid working environment.
During the to-be-reported quarter, AMD announced the Ryzen Embedded R2000 Series, second-generation mid-range system-on-chip (SoC) processors optimized for a wide range of industrial and robotics systems, machine vision, IoT and thin-client equipment.
The consensus mark for second-quarter revenues of this Zacks Rank #3 (Hold) company’s Computing and Graphics segment is pegged at $2.69 billion, which indicates an increase of 19.6% on a year-over-year basis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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