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What Awaits Advanced Micro Devices (AMD) in Q3 Earnings?
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Advanced Micro Devices (AMD - Free Report) is set to release third-quarter 2022 results on Nov 1.
The company expects third-quarter revenues to be $5.6 billion, which indicates year-over-year growth of 29%. AMD previously expected revenues to increase 55% at the midpoint of guidance.
The Zacks Consensus Estimate for revenues is pegged at $5.58 billion, suggesting growth of 29.45% from the year-ago quarter’s reported figure.
The consensus estimate for third-quarter earnings is pegged at 67 cents per share, unchanged over the past 30 days. The figure indicates a decline of 8.22% on a year-over-year basis.
AMD’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the earnings surprise being 14.85%, on average.
Advanced Micro Devices, Inc. Price and EPS Surprise
AMD’s preliminary third-quarter results reflect lower-than-expected client segment revenues due to reduced processor shipments resulting from weaker than expected PC market and significant inventory correction. The fall in client segment revenues is expected to have affected AMD’s revenue guidance in the third quarter.
Also, rising geo-political tensions between the United States and China, the global supply chain challenges that have hurt the semiconductor industry, the ongoing Russia-Ukraine war, which has caused natural gas prices to surge across Europe, rising inflation globally and the Fed’s interest rate hike are expected to have affected AMD’s top-line growth in the third quarter.
Also, AMD, which currently carries a Zacks Rank# 5 (Strong Sell), is facing stiff competition from its peers like NVIDIA (NVDA - Free Report) and Intel (INTC - Free Report) across other verticals where the company is operating.
NVIDIA is giving AMD tough competition in the high-performance computing (HPC) market. NVIDIA’s Grace CPU superchips have been benefiting from the rapid proliferation of Artificial Intelligence (AI) while the company is expanding its base in untapped markets like climate science, energy research, space exploration and digital biology.
Intel is still the leading name in the consumer PC market and is the major competitor of AMD in this segment. INTC is gradually reducing its dependence on the PC-centric business by transitioning to data-centric businesses such as AI and autonomous driving.
However, AMD is expected to have earned significant revenues from its data center, gaming and embedded business segments as it invests heavily to diversify its product portfolio to cater to trending high-growth markets.
AMD’s third-quarter earnings expected to have gained from the improving performance of its Ryzen processors to help address the increasing proliferation of AI and Machine Learning across various high-growth margin industries.
AMD has also built strategic partnerships with companies like Dell Technologies (DELL - Free Report) and original equipment manufacturer partners Hewlett Packard, Acer and Lenovo, which is expected to have helped it to launch new products, thus increasing revenue stream in the third quarter.
In late July, AMD collaborated with Dell to launch the most powerful 17” AMD Advantage laptop — Alienware m17 r5 Gaming Laptop. The collaboration will help AMD benefit from the rising gaming industry that will attain $545.98 billion by 2028, witnessing a CAGR of 13.20% between 2021 and 2028, according to Fortune Business Insights.
The company’s top line is expected to have benefited from its acquisition of Xilinx. The buyout has expanded AMD's technology and product portfolio and helped access augmented reality space (AR).
Key Q3 Developments
During the third quarter, AMD announced that it formed a strategic collaboration with ECARX, a global mobility tech company, to develop an in-vehicle computing platform for next-generation electric vehicles.
During the to-be-reported quarter, it unveiled Ryzen Embedded V3000 series processors with the Zen 3 core to the V series portfolio. The processors are designed to provide greater CPU performance using less power than the older V1000 series.
AMD joined the newly-launched PyTorch foundation as a founding member. The organization is part of the non-profit Linux establishment, created to drive the adoption of AI.
Image: Bigstock
What Awaits Advanced Micro Devices (AMD) in Q3 Earnings?
Advanced Micro Devices (AMD - Free Report) is set to release third-quarter 2022 results on Nov 1.
The company expects third-quarter revenues to be $5.6 billion, which indicates year-over-year growth of 29%. AMD previously expected revenues to increase 55% at the midpoint of guidance.
The Zacks Consensus Estimate for revenues is pegged at $5.58 billion, suggesting growth of 29.45% from the year-ago quarter’s reported figure.
The consensus estimate for third-quarter earnings is pegged at 67 cents per share, unchanged over the past 30 days. The figure indicates a decline of 8.22% on a year-over-year basis.
AMD’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the earnings surprise being 14.85%, on average.
Advanced Micro Devices, Inc. Price and EPS Surprise
Advanced Micro Devices, Inc. price-eps-surprise | Advanced Micro Devices, Inc. Quote
Factors at Play
AMD’s preliminary third-quarter results reflect lower-than-expected client segment revenues due to reduced processor shipments resulting from weaker than expected PC market and significant inventory correction. The fall in client segment revenues is expected to have affected AMD’s revenue guidance in the third quarter.
Also, rising geo-political tensions between the United States and China, the global supply chain challenges that have hurt the semiconductor industry, the ongoing Russia-Ukraine war, which has caused natural gas prices to surge across Europe, rising inflation globally and the Fed’s interest rate hike are expected to have affected AMD’s top-line growth in the third quarter.
Also, AMD, which currently carries a Zacks Rank# 5 (Strong Sell), is facing stiff competition from its peers like NVIDIA (NVDA - Free Report) and Intel (INTC - Free Report) across other verticals where the company is operating.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
NVIDIA is giving AMD tough competition in the high-performance computing (HPC) market. NVIDIA’s Grace CPU superchips have been benefiting from the rapid proliferation of Artificial Intelligence (AI) while the company is expanding its base in untapped markets like climate science, energy research, space exploration and digital biology.
Intel is still the leading name in the consumer PC market and is the major competitor of AMD in this segment. INTC is gradually reducing its dependence on the PC-centric business by transitioning to data-centric businesses such as AI and autonomous driving.
However, AMD is expected to have earned significant revenues from its data center, gaming and embedded business segments as it invests heavily to diversify its product portfolio to cater to trending high-growth markets.
AMD’s third-quarter earnings expected to have gained from the improving performance of its Ryzen processors to help address the increasing proliferation of AI and Machine Learning across various high-growth margin industries.
AMD has also built strategic partnerships with companies like Dell Technologies (DELL - Free Report) and original equipment manufacturer partners Hewlett Packard, Acer and Lenovo, which is expected to have helped it to launch new products, thus increasing revenue stream in the third quarter.
In late July, AMD collaborated with Dell to launch the most powerful 17” AMD Advantage laptop — Alienware m17 r5 Gaming Laptop. The collaboration will help AMD benefit from the rising gaming industry that will attain $545.98 billion by 2028, witnessing a CAGR of 13.20% between 2021 and 2028, according to Fortune Business Insights.
The company’s top line is expected to have benefited from its acquisition of Xilinx. The buyout has expanded AMD's technology and product portfolio and helped access augmented reality space (AR).
Key Q3 Developments
During the third quarter, AMD announced that it formed a strategic collaboration with ECARX, a global mobility tech company, to develop an in-vehicle computing platform for next-generation electric vehicles.
During the to-be-reported quarter, it unveiled Ryzen Embedded V3000 series processors with the Zen 3 core to the V series portfolio. The processors are designed to provide greater CPU performance using less power than the older V1000 series.
AMD joined the newly-launched PyTorch foundation as a founding member. The organization is part of the non-profit Linux establishment, created to drive the adoption of AI.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.