Business & Investment

Opinion: AMD bets by investors is finally here

Advanced Micro Devices Inc. has finally achieved many of the major goals investors have been working on over the past few years as investors have driven their shares to become the largest S & P 500 winner for the second consecutive year.

But now it faces future challenges.

on Tuesday, AMD reports record fourth quarter, revenue surpasses $ 3 billion Full-year sales were the first record of $ 9.76 billion, up 45% year-on-year. AMD
+ 0.62%

It also generated record profits, and from these record results we predicted significant profits a year ahead.

Still, stocks were basically resting in after-hours trading — they’re actually down a bit. And that’s where AMD investors are now having problems. What will happen next?

The company has appreciated the new family of chips based on the new architecture, but the biggest expectation was its plans to re-enter the server market, which began with the new Epyc chip in 2017. AMD has made great strides in its large and fast-growing market and is about to launch a third-generation server / data center chip family, codenamed Milan. According to AMD, sales of chips sold to data centers make up a teenage share of total revenue, Still, it doesn’t split those sales.

“We are pleased with the progress in our data center business … 2020 was a strong year for us. AMD CEO Lisa Su called an analyst on Tuesday until 2021. He said there is significant growth. “I think there are many drivers … First of all, we see the cloud business being strengthened for us. She later added that AMD is building deeper customer relationships as a result of the popularity of AMD’s products.

AMD shares were the largest performers on the S & P 500

In both 2019 and 2018 The company has begun to show results.

The company’s forecast for full-year 2021 revenue growth of 37%, compared to 45% in 2020, is that the law of large numbers is beginning to come into force, resulting in slowing profits. Is shown.

Another problem at hand is Many on Wall Street believe AMD has benefited from the failure of its biggest rival, Intel Corp.
Now that Intel’s acclaimed new CEO Pat Gelsinger is about to take the lead, many are worried that the resurrected Intel could eventually make AMD’s mincemeat. ..

“The replacement of Intel’s White Knight CEO has had a slight impact on AMD’s recent story, as it depends on AMD’s long-term competitiveness and growth, so it’s newly discovered. Intel’s hopes came at the expense of some AMD, “Bernstein Research analyst Stacy Rasgon said in a earnings preview to clients.

Equities are currently trading at about 50 times Wall Street’s current estimate for 2021, and investors are faced with the challenge of deciding how much AMD will improve in the future. .. It’s a big deal.

Opinion: AMD bets by investors is finally here Opinion: AMD bets by investors is finally here

Back to top button