Advanced Micro Devices ( AMD Quick Quote AMD - Free Report) is expected to report sluggish embedded revenues in second-quarter 2023 earnings, set to be released on Aug 1, due to weak 5G deployment. AMD expects a modest decline in Embedded segment revenues on a sequential basis but an increase year over year in the to-be-reported quarter. Embedded solutions growth on a sequential basis is expected to have suffered from delayed 5G deployment in North America, as witnessed by telecommunication equipment and solution providers like Nokia ( NOK Quick Quote NOK - Free Report) and Ericsson ( ERIC Quick Quote ERIC - Free Report) in their recently concluded second quarters. Nokia witnessed sluggish spending from customers in North America on 5G deployment, which partially offset strong growth from India. Ericsson also witnessed moderating pace of deployment in North America and rebalancing of customer inventory levels. AMD’s embedded processors and GPUs are designed to support high-performance and bandwidth network connectivity. Its FPGAs and Adaptive SoCs have been gaining traction in the 5G wireless market.
In first-quarter 2023, AMD expanded its embedded processor portfolio with the launch of the Ryzen 5000 and EPYC 9000 embedded series processors.
Our model estimates for Embedded segment revenues are pegged at $1.57 billion, indicating 25% year-over-year growth. Click here to know how AMD’s overall second-quarter performance is likely to be. Diversified Product Portfolio: Key to AMD’s Prospects
AMD’s second-quarter results are likely to benefit from its expanding product portfolio, which caters to trending high-growth markets like cloud, gaming, data center and EV.
The company is riding on an expanding partner base and strong demand for EPYC, Radeon and Ryzen processors. Moreover, acquisitions, including Xilinx and Pensando, have diversified its business. The continued strong adoption of EPYC processors by the likes of Dell, Alphabet, Hewlett Packard Enterprise ( HPE Quick Quote HPE - Free Report) , Lenovo, Microsoft and Oracle are expected to have benefited data center revenues in the to-be-reported quarter. In the to-be-reported quarter, AMD announced its expanded collaboration with Hewlett Packard to provide support to the new modular and multi-protocol storage solution, HPE Alletra Storage MP, with AMD EPYC Embedded Series processors. Moreover, this Zacks Rank #3 (Hold) company has constantly been improving the performance of its Ryzen processors to help address the increasing proliferation of Artificial Intelligence and machine learning in industries like cloud, gaming and data center. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. In the second quarter, AMD announced the addition of two new workload-optimized processors, 4th Gen AMD EPYC processors with AMD 3D V-Cache technology, which is ideally suited for demanding technical computing workloads. AMD also announced its new Ryzen PRO 7040 series mobile processors, which feature the most advanced and power-efficient x86 processors on premium Windows 11 business laptops and mobile workstations. Moreover, AMD announced the AMD Radeon RX 7600 graphics card, built on RDNA 3 architecture. It is designed to deliver high-performance 1080p gaming, streaming and content creation with high fidelity. Nevertheless, AMD expects a decline in Client, Gaming and Data Center segments in the second quarter. Our model estimates for Data Center revenues are pegged at $1.37 billion, indicating a year-over-year decline of 8%. Client revenues are estimated to plunge 62.4% year over year to $809.2 million. Our model suggests Gaming revenues to decline 6.6% year over year to $1.55 billion.
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