Shares of Advanced Micro Devices (NASDAQ: AMD) have been rising after the semiconductor company reported its second-quarter earnings that beat analyst predictions with a stick. AMD reported its seventh straight quarter of double-digit revenue growth on Tuesday, leaving Nvidia Corporation (NASDAQ: NVDA) and Qualcomm Incorporated (NASDAQ: QCOM) trading flat to lower on Wednesday. The surge in AMD’s both revenue and earnings, driven by the ongoing global semiconductor shortage that has driven up both demand and prices for chips that go in everything, from cars and home appliances to children’s toys, wasn’t enough to bring other chips and graphics card makers in for the ride.
Q2 Figures
If we look at pro forma figures, instead of earning $0.54 per share on sales of barely $3.6 billion as expected by analysts, AMD reported a $0.63-per-share profit on sales that amounted to $3.85 billion. When looking at GAAP figures, numbers aren’t quite as good but they are still good enough. Sales doubled YoY, rising 99% from last year’s figure. Operating profit margin more than doubled to 22%. As for the bottom line, profit amounted to $0.58 per share, up 346% from last year’s $0.13 per share.
Outlook
Updating guidance for the quarter to come, AMD updated its third-quarter guidance, expecting revenue at about plus or minus $100 million of $4.1 billion, which would imply a 6% improvement compared to Q2 numbers, 46% growth compared to last year ago, and well ahead of analysts forecast that estimated $3.8 billion. Sales of chips to the data center and gaming businesses is expected to keep driving growth with AMD planning to maintain its current 48% gross profit margin in both the undergoing and the whole of 2021.
Highlights
For its second quarter, AMD reported 99% YoY growth in revenue driven by 65% YOY growth in its computing and graphics segment and 183% YoY in its enterprise, embedded, and semi-custom segment. It also increased its guidance, now expecting 60% YoY growth for 2021. The chipmaker reported its fifth straight quarter of record server processor revenue due to the strong demand for its Epyc processor after Intel (NASDAQ: INTC) reported a decline in its data center group last week. The demand for graphic cards is still high so as good as Q2 was, Q3 could be even better for AMD.
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