Lisa Su, president and chief executive officer of Advanced Micro Devices (AMD), holds a 3rd generation Ryzen desktop processor while speaking during a keynote session at the 2019 Consumer Electronics Show (CES) in Las Vegas, Jan. 9, 2019.
David Paul Morris | Bloomberg | Getty Images
AMD stock rose over 3% in extended trading after the company announced revenue and earnings that beat Wall Street’s already high expectations for the chipmaker.
Here’s how AMD did versus Wall Street expectations:
- EPS: $0.52, adjusted, versus $0.47 according to Refinitiv consensus estimates
- Revenue: $3.24 billion, versus $3.03 billion according to Refinitiv consensus estimates
AMD also provided a strong forecast for the current quarter of between $3.1 billion and $3.3 billion and said that it expects 2021 revenue would grow 37%. However, AMD’s revenue in 2020 was up 53% year-over-year.
One highlight was AMD’s embedded segment which was up 176% year-over-year to $1.28 billion. That division sells server chips as well as CPUs and graphics processors for game consoles like the Sony PS5 and Microsoft Xbox One.
Its business selling processors and graphics chips for PC, which it calls Computing & Graphics, rose 18% year-over-year to $1.96 billion.
At the start of trading on Tuesday, shares of AMD were up 85% over the past year. That’s partially because of investor enthusiasm for semiconductors, but it’s also because in the past year AMD has gained a technological edge on its primary competitor, Intel.
AMD outsources its manufacturing to partners including Taiwan’s TSMC, whereas Intel is still committed to manufacturing its best chips. That’s allowed AMD to access more advanced chip manufacturing on a so-called 5-nanometer process, which makes denser and more efficient chips.
AMD also launched new processors and graphics chips last fall that have been consistently sold out.
In October, AMD announced that it planned to buy Xilinix in a deal worth $35 billion that should close by the end of this year. Xilinix focuses on specialized chips that can efficiently handle tasks like compressing videos, as compared to AMD’s general purpose processors. The acquisition is expected to give AMD more firepower to compete with Intel in the data center chip market.