AMD shares rose 7% on upbeat economic news

02/01/2023

1 minute read

2023.02.01 11:29

By Ray Johnson

Budrigannews.com – Advanced Micro Devices (NASDAQ:) shares Inc gained nearly 7% on Wednesday after the optimistic earnings of the American chipmaker demonstrated that it was compensating for a slump in personal computers with gains in the lucrative data center market.

The results, which defied rival Intel Corp’s (NASDAQ:) “historic collapse,” were cheered by at least 11 analysts, who raised the stock’s rating. and fueled hopes that the server market would continue to grow this year.

AMD, led by Lisa Su, beat Wall Street’s expectations for revenue on Tuesday, but its sales forecast for the three months ending March 31 fell short by more than $150 million.

In a note, Bernstein analysts stated:

“While on an absolute basis results were not great, relative to their larger competitor’s report last week the print came across much better.”

Intel appears to be impacted significantly more severely.

AMD’s revenue from the data center business increased by 42% during the quarter, while Intel’s revenue from the data center and artificial intelligence unit decreased by 33% during the same time period.

AMD’s faster and smaller chips have enabled it to gain ground on Intel in the data center market, which has slowed down in recent months due to lower spending from businesses that are wary of the recession.

Third Bridge analyst Lucas Keh stated:

“AMD can continue to beat Intel in the data center space due to its leading design.”

AMD’s increase in the server market this year, according to J.P. Morgan, should be between 5 and 7 percentage points, or between 28 and 30 percent.

According to the company, sales at the business, which includes its PC chip unit, fell 51% in the quarter. The company began under-shipping PC chips last year in response to decreasing demand for processors.

Su stated: