AMD Reports Second Quarter 2022 Financial Results. Analysts have updated forecasts for 2023

On August 2, 2022 the AMD company published financial results for the 2nd quarter 2022. The report beat Wall Street analysts’ expectations. The company managed to maintain record revenue for 8 quarters in a row. AMD is showing growth in almost all sectors. The chipmaker managed to increase its gross margin by 65%. At the same time, net profit fell by almost 37%, which affected the decline in shares after the publication of the report. Operation earnings were lower than analysts had forecast. The fall in some AMD indicators is associated with the write-off of expenses for the purchase of Xilinx. Demand for AMD products remains strong. The company managed to increase its market share in the DPC (Data Processing Center) to 28%. AMD has expanded its forecast for 2022. The weak outlook for Q3 2022 contributed to the decline in share prices.

Main financial indicators from the AMD report for the 2nd quarter of 2022

• – Revenue = $6.55 billion ($6.53 billion forecast)
• – EPS earnings per share = $1.05 (forecast $1.03)

Data center revenue grew 83% driven by the introduction of Pensando and Xilinx products. Ryzen processors are still in high demand. The client segment accounts for AMD’s main revenue.

For two years, AMD has been showing good results. AMD processes are in demand in the market. However, geopolitical risks with Taiwan and China must be taken into account, since processors and video cards for AMD are manufactured by the Taiwanese corporation TSMC (Taiwan Semiconductor Manufacturing Company). The conflict between the US and China over Taiwan could disrupt key supplies for AMD products.

The gaming industry and PC components are the dominant share of AMD’s revenue. The global economy is experiencing an increase in technological developments, and this trend will continue. Therefore, the long-term outlook for AMD shares remains positive.

Analyst firms Raymond James, Citigroup, Morgan Stanley cut AMD share price targets for 2023.