AMD: Earnings Preview
Supported by the strong demand for Radeon, EPYC, and Ryzen processors, the revenues for Q4 are expected to grow by 41.7% from the same quarter last year to around $3 billion.
avatar
Shahid is a business graduate, with a knack for writing on business and finance topics.
2021-01-26 09:05

Advanced Micro Devices (NASDAQ: AMD) is scheduled to announce its Q4 earnings results on January 26. AMD’s stock has gained around 75% during the past year, with its price rising to around $88 from $50 a year ago.

AMD: Earnings Preview

Supported by the strong demand for Radeon, EPYC, and Ryzen processors, the revenues for Q4 are expected to grow by 41.7% from the same quarter last year to around $3 billion. The rise in revenue in Q4 equals 7.5% when compared with Q3 revenues. The increased revenue in Q4 2020 is expected to increase earnings per share by 47% at $0.43 per share, compared with Q4 2019.

The coronavirus-induced work-from-home orders and distant learning trends have been driving the demand for the company’s Radeon, EPYC, and Ryzen processors that are used in gaming, cloud computing, high-performance computing, and personal computers.

The data center and cloud computing providers are adopting the company’s second-generation EPYC processors, increasing AMD’s revenue in the server segment. AMD’s Semi-custom revenue is also expected to increase because of the higher production as a result of high demand for Xbox Series S, Playstation 5, and Xbox Series X. The PC shipments also witnessed an increasing trend during Quarter 4, which would have also contributed to the company’s revenue. The computers and graphics division is also likely to have jumped because of the rising demand for the company’s Ryzen 4000 processors for smartphones.

During Q4, AMD developed a new desktop processor called Ryzen 5000 based on Zen 3 architecture that facilitates and improves gaming and workload performance. Thanks to the high demand for Apple’s MacBook Pro, the company’s M Series Radeon Pro 5000 GPU is expected to have contributed to the company’s top-line.

The company plans to expand its data center business by buying out Xilinx — a chip manufacturing company based in San Jose, California — for $35 billion. The deal is expected to be completed by the end of 2021. Some notable chips and processors launched by the company during the Q4 include the Ryzen Embedded V2000 Series processor, Radeon RX 6000 Series graphics card, and the Instinct M100 accelerator.

Although, the company is expected to generate strong Q4 2020 results, the increase in its expenses because of the stiff competition from its rivals NVIDIA and Intel will likely keep the margins in check. AMD’s stock is currently selling at a premium as it’s forward price-to-earnings ratio stands at 49 against the industry’s average of 22.


Disclaimer: I have no positions in any of the stocks mentioned. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. All information should be independently verified and should not be relied upon for purposes of transacting securities or other investments. See terms for more info.

Rate this article

positive
negative
Published On
2021-01-26 09:05

avatar
About the Author
Shahid is a business graduate, with a knack for writing on business and finance topics.


buy-coffee
You've read 1 article in the last year
..thank you for supporting us and for visiting our site. Unlike many other sites, The Dog of Wall Street is available for everyone to read. Our focus is to provide great content for free. Do you like what we are doing? Buy us a cup coffee. It is the fuel that keeps us going..

3 Final Earnings I'm Watching For the Coming Week
There are still some major companies reporting this week.
By Mike Sakuraba | 4 weeks ago

Don’t Be Caught In The Bed and Beyond Meme Stock Madness!
Meme stock valuation depends on the hype, not the stock's fundamentals.
By Precious Njoku | 1 month ago

Stocks Buffett's Berkshire Hathaway (BRKB) Sold Off This Year
This year, Warren Buffett has sold a considerable number of stocks.
By Precious Njoku | 1 month ago

BBBY Short Squeeze: Have We Learned Our Lesson Yet?
Ryan Cohen Does Not Owe Us Anything.
By Mike Sakuraba | 1 month ago

Why Electric Vehicle Stocks Have an Uphill Climb
Rivian Cancels Pre-Orders, Short Seller Bets Against Tesla.
By Mike Sakuraba | 1 month ago

3 More Earnings to Focus On Next Week
Here are actually a few major companies that will be reporting next week.
By Mike Sakuraba | 1 month ago

Why Softbank's Sale of Alibaba Stock was a Good Move
Softbank Group Corp. (OTCMKTS: SFTBY),a Japanese multinational company, has gained much reputation over the years for investing in startups and making money.
By Precious Njoku | 1 month ago