Advanced Micro Devices, Inc. (AMD) posted second-quarter financial results on Tuesday and revealed it increased its 2019 revenue by 26 percent. The firm also beat Wall Street’s revenue estimates for the June period due to robust server and notebook chip demand. The company anticipates its strong performance will continue through the second half and raised its full-year sales forecast.
AMD’s Excellent Q2 Performance
The Santa Clara, California-based chipmaker made $1.93 billion in the second quarter, a substantial increase from the $1.53 billion it made in the same timeframe last year. The firm also significantly improved its net income year-over-year, earning $157 million or $0.13 per share vs. $35 million or $0.03 per share in 2019. CNBC noted Wall Street estimated AMD would make $1.86 billion with earnings per share of $0.16 last quarter.
Following the disclosure of its financial results, the microelectronics brand’s stock price rose by 10 percent.
The company’s strong quarterly performance is due in large part to a surge in its computing and graphics chip sales. That segment earned $1.37 billion in Q2 2020, up 45 percent from Q2 2019. Like SK Hynix and Intel, the firm saw demand for its products spike as millions of people recently transitioned to working from home because of the coronavirus pandemic.
AMD also saw a major upswing in its enterprise component segment earnings, which beat its 2019 sales by 45 percent. The company noted web service providers Google, Amazon, and Dell used its processors in the latest data center offerings. Bloomberg reports the chipmaker represents 10 percent of the interim server market, up significantly from its 1 percent share in 2017.
AMD Anticipates Continued Growth in the Second Half
Although it did very well in the second quarter, AMD forecasts even better results in the third quarter and for full-year 2020.
The firm offered guidance it would generate $2.55 billion in revenue in the September ending period, plus or minus $100 million. If the brand hits its earnings range, its business will grow by 36 to 47.2 percent year-over-year. The chipmaker also expects its full-year revenue to grow by 32 percent on an annual basis, up from the 25 percent it predicted in April.
Market analysts believe the firm will report $2.32 billion in Q3 sales, with 25 percent growth from 2019.
AMD expects its business to continue expanding due to ongoing robust consumer demand for its PC, data center, and GPU products. In an investor call, CEO Dr. Lisa Su noted large purchases from Microsoft and Sony would also bolster her company’s bottom line. The chipmaker is supplying cutting components for the PlayStation 5 and Xbox Series X video game consoles.
With Sony doubling PS5 production and notebook shipments reportedly on the rise in 2H20, the company’s guidance seems on point. The mixture of changing consumer buying habits, a new video game system cycle starting, and its ability to release best-in-class chips is helping AMD become a major player in the electronic component sector.