Finance

AMD says data center boom will boost revenue; shares rise

An indication of AMD is seen on the China Digital Leisure Expo and Convention, also referred to as ChinaJoy, in Shanghai, China July 30, 2021. REUTERS/Aly Tune

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Could 3 (Reuters) – Superior Micro Gadgets Inc (AMD.O) on Tuesday forecast stronger- than-expected full 12 months and second-quarter income, with the info middle growth boosting demand for its chips,and its shares rose in after-hours commerce.

“Every of our companies grew by a big double digit

share year-over-year, led by EPYC server processor income greater than doubling for the third straight quarter,” mentioned AMD chief govt Lisa Su in its assertion.

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The sturdy outlook and earnings pushed up AMD shares by 3% in after-hours buying and selling.

Worldwide spending on cloud infrastructure companies jumped 34% to $55.9 billion within the first quarter, in response to information from analysis agency Canalys, highlighting big alternatives for firms supplying chips and different {hardware} to the trade.

Nonetheless Summit Insights Group analyst Kinngai Chan referred to as AMD’s second quarter outlook “aggressive” and added there was extra draw back danger within the PC and graphic card markets.

Graphic card costs have been falling in latest weeks as demand for client merchandise that use them have been softening with the lockdown in China and inflation issues.

On the earnings name with analysts, Su mentioned AMD anticipated the entire PC market to fall by a excessive single digit this 12 months. “Our focus stays on the premium, gaming and industrial parts of the market the place we see sturdy development alternatives and anticipate to proceed gaining general shopper income share,” she mentioned.

The corporate mentioned it expects income of about $6.5 billion, plus or minus $200 million for the present quarter. Analysts on common have been anticipating income of $6.38 billion, in response to Refinitiv information. For the total 12 months it forecast $26.3 billion, up about 60%, and forward of analysts estimates of $25.145 billion in response to Refinitiv IBES information.

AMD’s first-quarter income got here in at $5.89 billion, above analysts’ common estimate of $5.52 billion, in response to Refinitiv IBES information. On an adjusted foundation, AMD earned $1.13 per share, throughout the quarter, in comparison with Road’s estimates of 91 cents per share, in response to Refinitiv information.

AMD finalized the acquisition of Xilinx Inc in mid-February. The earnings and forecasts embody its outcomes.

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Reporting by Tiyashi Datta in Bengaluru; Enhancing by Aditya Soni, Anil D’Silva, Cynthia Osterman and David Gregorio

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