AMD took ‘tons of share’ from Intel in Q2

Advanced Micro Devices Inc (NASDAQ: AMD) reported record sales for its fiscal second quarter on Tuesday. Shares still slid 7.0% after the bell on roughly in-line guidance.

Notable figures in AMD Q2 earnings report

• Net income printed at $447 million versus the year-ago $710 million
• Per-share earnings of 27 cents were much worse than last year’s 58 cents
• On an adjusted basis, EPS stood at $1.05, as per the earnings press release
• Revenue shot up 70% on a year-over-year basis to a record $6.55 billion
• FactSet consensus was $1.03 of adjusted EPS on $6.53 billion in revenue
• Adjusted gross margins climbed six percentage points from 48% to 54%

Advanced Micro Devices’ results were particularly fabulous considering the “horrendous” report Intel released last week.

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Bernstein analyst reacts to AMD Q2 results

Other notable figures in AMD Q2 results include a 25% and 32% annualised growth in Client and Gaming sales, respectively. Embedded sales came in at $1.26 billion versus only $54 million in the same quarter last year when the multinational didn’t have Xilinx under its umbrella.

Revenue from data centre went up 83% in the fiscal second quarter. Reacting to the earnings print on CNBC’s “Closing Bell: Overtime”, Bernstein’s Stacy Rasgon said:

Even in a weakening PC environment, AMD’s client revenues are up 25% so they’re clearly taking tons of share and they’re not being impacted by the same kind of inventory flushing that their larger competitors are impacted by.

AMD stock hit due to ‘slightly’ weak guidance

For the full financial year, AMD forecasts its revenue to fall between $26 billion and $26.6 billion, including $6.5 billion to $6.9 billion it expects in Q3. In comparison, analysts had called for $6.84 billion this quarter and $26.21 billion for FY22 as a whole.

The semiconductor behemoth reiterated its guidance for a 54% gross margin this year. According to CEO Lisa Su, effects of a slowdown in PCs was evident but data centre sales did and will continue to drive growth moving forward.

AMD is also committed to launching its new 5nm chips later this quarter. Rasgon added:

The guide is just a little bit light. In this environment where PCs are getting weaker, that’s okay. They held the full year, so, they’re still looking for a decent recovery into Q4. The implied Q4 gross margin of 55% suggests the mix is getting better, which may suggest data centre continuing strength into the end of the year.

AMD stock is down more than 35% for the year.