AMD (NASDAQ: AMD) stock price rallied more than 10% after reporting stronger than expected second-quarter earnings. The robust third quarter and full-year outlook added to investor’s sentiments.
Its second-quarter revenue of $1.93bn topped analysts’ expectations by $70 million, indicating an upside of 26% from the past year period. The sharp revenue growth from computing and graphics segments helped in generating massive revenue growth. Its computing and graphics segments revenue surged 45% year over year.
“We delivered strong second-quarter results, led by record notebook and server processor sales as Ryzen and EPYC revenue more than doubled from a year ago,” said Dr. Lisa Su, AMD president, and CEO. “Despite some macroeconomic uncertainty, we are raising our full-year revenue outlook as we enter our next phase of growth driven by the acceleration of our business in multiple markets.”
The company expects third-quarter revenue in the range of $2.45-2.65B, up close to 45% from the year-earlier, and representing a growth of 32% from the previous quarter, thanks to revenue expectations from Ryzen and Epyc processor sales. The company also claims that its semi-Custom revenue is likely to benefit from the next-gen game consoles.
It expects full-year revenue to jump 32% compared to 2019. The company was previously expecting full-year revenue growth in the range of 20-30%. The PC, gaming, and data center products are likely to benefit from improving demand.
Bank of America has provided a price target of $100 after the solid quarterly performance. The firm praised AMD’s solid pipeline, consistent execution and, expanding market opportunity. The firm has raised AMD’s CY20/21/22E EPS estimates by 6%, 11%, and 17%, respectively. It expects AMD to post $2B in revenue by CY22E and earnings per share is likely to $3 by CY23E.