[ad_1]
![AMD sees strength in data centers, shares rise](https://static.toiimg.com/thumb/resizemode-4,msid-95245653,imgsize-44006,width-720/95245653.jpg)
Advanced Micro Devices Inc forecast some strength in its data center business and promised to be careful with spending, sending shares up despite business being hit by a deepening PC market slump.
AMD forecast fourth-quarter and full-year revenue below Wall Street estimates, but Kinngai Chan, an analyst at Summit Insights Group, suggested investors had braced for worse.
“While AMD’s 4Q22 sales outlook was below consensus expectations, we believe investors are somewhat relieved that AMD expects its data center and embedded businesses to grow sequentially,” Chan said.
Shares rose 6.3% in after-hours trade.
While AMD has been growing its market share quickly in the datacenter, rival Intel Corp. has seen its share slip even in its latest earnings reported.
Read Also
“We expect AMD’s share gains to continue, as the company’s upcoming, next-generation server CPUs are expected to outperform Intel’s lineup across price and performance metrics,” said Nathaniel Harmon, analyst at YipitData.
Still chip analyst Dean McCarron at Mercury Research cautioned AMD is not immune to the slowdown in the data center market, noting the 8% quarter-to-quarter growth in the third quarter compared with the growth rate a year ago in the same period of 36%.
AMD executives said on the earnings call they were controlling expenses and slowing down hiring to cope with the macroeconomic headwinds.
AMD, which makes CPUs and graphics processors for PCs and data centers, has also been hit hard as inflation hurt consumer demand for laptops and other gadgets, prompting electronics makers to cut orders for its chips.
That led AMD to lower its forecast for third-quarter revenue by about $1 billion last month.
According to Counterpoint Research, PC shipments will decline 13% this year.
AMD Chief Executive Lisa Su told analysts that 2023 PC business outlook should be modeled on a 10% drop of total PC unit sales.
Su added the North American cloud market was the most resilient of the data center market segments, though she did not expect significant recovery of the China data center market in 2023.
The company expects current-quarter revenue to be $5.5 billion, plus or minus $300 million. Analysts on average expect revenue to be $5.85 billion, according to Refinitiv data.
For the full year 2022, AMD expects revenue to be approximately $23.5 billion, plus or minus $300 million, up 43% from 2021, versus analyst expectations of $23.9 billion.
Revenue at its client segment, which includes chips for desktops, fell 40% to $1 billion during the third quarter. While its Data Center revenue was $1.6 billion, up 45% year-on-year.
FacebookTwitterLinkedin
[ad_2]
Source link