AMD Q3 Results: Why is AMD share price rallying post quarterly results?
Advanced Micro Devices or AMD is a semiconductor company that develops computer processors and related technologies for consumer and business markets. AMD reported its third quarter results slightly below street estimates. However, AMD share price rose 6% as it indicated its server chip business will grow in the quarters ahead. However, in 2022, AMD stock have fallen more than 60% amid rising inflation, interest rates, supply chain issues and export ban to China.
AMD Q3 Results 2022 Key highlights:
|Net Income||$66 million||-93%|
Let us look at AMD Quarter Results in detail.
AMD Q3 2022 Revenue: The company reported a revenue of $5.57 billion below analysts' expectations of $5.62 billion. The company's revenue increased 29% year on year driven by growth across the Gaming, Data Center, and Embedded segments.
Source: AMD Q3 presentation
AMD Q3 Revenue across segments: Data Center segment revenue was $1.6 billion, up 45% year-over-year. Client segment revenue was $1.0 billion, down 40% year-over-year. Gaming segment revenue was $1.6 billion, up 14% year-over-year. Embedded segment revenue was $1.3 billion, up 1,549% year-over-year.
AMD Q3 earnings 2022: AMD reported a net income of $66 million, down 93% year on year mainly because of AMD’s $49 billion acquisition in February of Xilinx. It is a maker of chips called field-programmable gate arrays. In the year-ago period, the company reported a net income of $923 million. Earning was 67 cents per share (adjusted) against 68 cents per share estimates.
Source: AMD Q3 presentation
AMD quarterly results Operating loss: It reported an operating loss was $64 million, compared to an operating income of $948 million in the year-ago period. The loss was primarily due to the amortization of intangible assets associated with the Xilinx acquisition and increased R&D investments.
AMD Q3 earnings Cash & Cash equivalent: Cash, cash equivalents, and short-term investments were $5.6 billion at the end of the quarter. The company repaid the $312 million 7.50% Senior Notes that matured in August and repurchased $617 million of common stock during the quarter.
AMD quarterly results Guidance: For the full year, the company sees $23.5 billion in revenue, down from the $26.3 billion forecast the company gave in August. Analysts had expected $23.88 billion in revenue. The company contracted its adjusted gross margin outlook to 52% from 54% in August.
How were AMD's third-quarter results?
AMD reported a mixed set of numbers for the September quarter and the numbers missed expectations.
What is the target price for AMD shares?
The average target price from 28 analysts is $90 per share.
Is AMD a Buy, Sell or Hold?
As per consensus, it is a moderate buy as 19 analysts have given a BUY call, 9 have given HOLD and 1 has given a SELL call for AMD shares.