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Amazon.com, Inc. (AMZN) - $25 value - yours FREE >>
Advanced Micro Devices, Inc. (AMD) - $25 value - yours FREE >>
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AMD's Q4 Earnings to Benefit from Strong Demand for GPU
Advanced Micro Devices (AMD - Free Report) is set to report fourth-quarter 2017 results on Jan 30. The company is expected to gain from robust demand of graphic processor unit (GPU), which is now profusely used in industries like gaming, automotive and blockchain.
Increasing adoption of Artificial Intelligence (AI) techniques and machine learning tools in these industries are primarily responsible for driving GPU demand. AMD along with NVIDIA (NVDA - Free Report) is benefiting from this demand.
Moreover, GPUs have been in strong demand owing to increasing mining of cryptocurrencies, like Bitcoin and Ethereum. AMD, on the back of robust GPU product portfolio, has been benefiting from this trend.
These factors drove third-quarter 2017 results. The company achieved record GPU revenues on the back of improved average selling price (ASP) and higher unit shipments compared with the year-ago quarter.
AMD reports GPU sales under Computing and Graphics segment, which delivered revenues of $890 million, up 74% from the year-ago quarter. Moreover, improving mix of the higher margin GPUs also drove gross margin.
Advanced Micro Devices, Inc. Revenue (TTM)
Advanced Micro Devices, Inc. Revenue (TTM) | Advanced Micro Devices, Inc. Quote
The strong top-line growth was driven by rapid adoption of AMD’s GPUs by the likes of Amazon (AMZN - Free Report) and Baidu (BIDU - Free Report) . Amazon used Radeon Pro technology to power Amazon AppStream 2.0, while Baidu deployed Radeon Instinct GPUs in its datacenters.
Rapid adoption of Vega-based GPUs, Radeon E9170 Series GPUs and Polaris products are likely to boost the top-line growth in the to-be-reported quarter.
The Zacks Consensus Estimate for Computing and Graphics segment revenue is currently pegged at $839 million for the fourth-quarter.
AMD has a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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