Back to top

Image: Bigstock

Will Improving Client Segment Aid AMD's Q3 Earnings Growth?

Read MoreHide Full Article

Advanced Micro Devices (AMD - Free Report) is expected to report growth in the Client segment, both on a year-over-year and sequential basis, in third-quarter 2023 earnings, set to be released on Oct 31.

AMD’s third-quarter top-line growth is expected to have benefited from an improving PC market, particularly the consumer side.

Per Gartner’s latest report, global PC shipments totaled 64.3 million units in the third quarter of 2023, down 9% year over year. Gartner stated that strong demand from the education market drove PC demand amid sluggish enterprise sales.

Client revenues are expected to have increased 21.3% year over year to $1.24 billion, per our model.

Click here to know how AMD’s overall third-quarter performance is likely to be.

Diversified Product Portfolio: Key to AMD’s Prospects

AMD benefits from a robust product portfolio and expanding partner base. It continues to strengthen its footprint in the enterprise data center arena by leveraging the power of fourth-generation EPYC CPUs and Pensando data processing units.

AMD, along with its partners, continues to offer solutions that enable greater data center consolidation. Its partnerships with the likes of Dell Technologies (DELL - Free Report) , Microsoft (MSFT - Free Report) , Amazon’s (AMZN - Free Report) cloud arm Amazon Web Services (“AWS”), Alibaba and Oracle have been key catalysts.

Cloud providers like Microsoft, Amazon, Alibaba and Oracle deployed Genoa in the second quarter of 2023. Microsoft Azure announced the first Genoa-X HPC instances that offer more than five times higher performance in technical computing workloads compared with their prior generation.

Dell is leveraging AMD EPYC fourth-generation CPUs in its latest PowerEdge C6615 server. In combination with OpenManage Enterprise software, Dell servers enable cloud service providers to intelligently monitor their systems and deliver more efficient computing services.

Moreover, the availability of Bergamo is crucial, as several server providers like Dell, HPE, Lenovo and Supermicro launched their new Bergamo-based platforms in the third quarter. This is expected to have boosted AMD’s prospects, which currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

During the to-be-reported quarter, AMD announced that AWS has expanded its 4th Gen AMD EPYC processor-based offerings with the general availability of Amazon Elastic Compute Cloud (EC2) M7a and Amazon EC2 Hpc7a instances.

Our model estimates for Data Center revenues are pegged at $1.62 billion, indicating a year-over-year increase of 1%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

Published in