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AMD's Q4 Earnings: Semi-Custom & EPYC Demand to Aid Growth
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Advanced Micro Devices’ (AMD - Free Report) fourth-quarter 2021 results, to be reported on Feb 1, are expected to have benefited from the ongoing momentum in EPYC processors and semi-custom products’ sales.
However, higher investments by AMD on product development and platform, in order to retain its competitive stance, are likely to have affected profitability.
Click here to know how the company’s overall Q4 performance is expected to be.
Strong Demand for EPYC Processors: Key Catalyst
AMD has been clinching new deal wins for its EPYC processors from data centers, cloud and high-performance computing companies, including Amazon’s (AMZN - Free Report) cloud arm Amazon Web Services (AWS) and Microsoft’s (MSFT - Free Report) Azure.
During the to-be-reported quarter, Amazon’s cloud offering, Amazon Web Services, expanded its EPYC processor-based offerings with the general availability of general-purpose Amazon EC2 M6a instances.
Moreover, AMD announced that Microsoft Azure is using third-generation AMD EPYC processors in its latest Dasv5 and Easv5 Azure Virtual Machines.
AMD’s increased server share is expected to have driven top-line growth in the to-be-reported quarter. AMD is riding on strong demand for both second- and third-generation EPYC processors.
Semi-custom revenues in the fourth quarter are anticipated to benefit from strong demand for Microsoft’s Xbox Series X, Xbox Series S and PlayStation 5 gaming consoles.
In third-quarter 2021, Enterprise, Embedded and Semi-Custom revenues of $1.90 billion were up 69% year over year and 20% sequentially.
The Zacks Consensus Estimate for the Enterprise, Embedded and Semi-Custom segment’s fourth-quarter revenues is pegged at $2.11 billion. The projection suggests an increase of 64.5% from the figure reported in the year-ago quarter.
Computing and Graphics Growth to Aid Top Line
AMD is expected to have witnessed steady demand for Ryzen processors in the fourth quarter due to the extension of the work-from-home and online-learning set up.
In the third quarter, AMD partnered with Microsoft to bring powerful, reliable computing to users with Windows 11, powered by Ryzen processors and Radeon graphics.
Moreover, Ryzen processors witnessed strong customer adoption with Lenovo (LNVGY - Free Report) starting shipments of the Thinkbook and Thinkpad E series business laptops featuring Windows 11.
Lenovo also announced Yoga Slim 7 Carbon and Yoga Slim 7 Pro.
The momentum with Ryzen is expected to have continued in the to-be-reported quarter.
The consensus mark for revenues for this Zacks Rank #2 (Buy) company’s Computing and Graphics segment for the fourth quarter is pegged at $2.40 billion, which indicates an increase of 22.3% on a year-over-year basis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, slowing PC shipments’ trend in the fourth quarter of 2021, due to component shortage and supply chain constraints, is expected to have hurt AMD’s performance in the to-be-reported quarter.
Image: Bigstock
AMD's Q4 Earnings: Semi-Custom & EPYC Demand to Aid Growth
Advanced Micro Devices’ (AMD - Free Report) fourth-quarter 2021 results, to be reported on Feb 1, are expected to have benefited from the ongoing momentum in EPYC processors and semi-custom products’ sales.
However, higher investments by AMD on product development and platform, in order to retain its competitive stance, are likely to have affected profitability.
Click here to know how the company’s overall Q4 performance is expected to be.
Strong Demand for EPYC Processors: Key Catalyst
AMD has been clinching new deal wins for its EPYC processors from data centers, cloud and high-performance computing companies, including Amazon’s (AMZN - Free Report) cloud arm Amazon Web Services (AWS) and Microsoft’s (MSFT - Free Report) Azure.
Advanced Micro Devices, Inc. Revenue (TTM)
Advanced Micro Devices, Inc. revenue-ttm | Advanced Micro Devices, Inc. Quote
During the to-be-reported quarter, Amazon’s cloud offering, Amazon Web Services, expanded its EPYC processor-based offerings with the general availability of general-purpose Amazon EC2 M6a instances.
Moreover, AMD announced that Microsoft Azure is using third-generation AMD EPYC processors in its latest Dasv5 and Easv5 Azure Virtual Machines.
AMD’s increased server share is expected to have driven top-line growth in the to-be-reported quarter. AMD is riding on strong demand for both second- and third-generation EPYC processors.
Semi-custom revenues in the fourth quarter are anticipated to benefit from strong demand for Microsoft’s Xbox Series X, Xbox Series S and PlayStation 5 gaming consoles.
In third-quarter 2021, Enterprise, Embedded and Semi-Custom revenues of $1.90 billion were up 69% year over year and 20% sequentially.
The Zacks Consensus Estimate for the Enterprise, Embedded and Semi-Custom segment’s fourth-quarter revenues is pegged at $2.11 billion. The projection suggests an increase of 64.5% from the figure reported in the year-ago quarter.
Computing and Graphics Growth to Aid Top Line
AMD is expected to have witnessed steady demand for Ryzen processors in the fourth quarter due to the extension of the work-from-home and online-learning set up.
In the third quarter, AMD partnered with Microsoft to bring powerful, reliable computing to users with Windows 11, powered by Ryzen processors and Radeon graphics.
Moreover, Ryzen processors witnessed strong customer adoption with Lenovo (LNVGY - Free Report) starting shipments of the Thinkbook and Thinkpad E series business laptops featuring Windows 11.
Lenovo also announced Yoga Slim 7 Carbon and Yoga Slim 7 Pro.
The momentum with Ryzen is expected to have continued in the to-be-reported quarter.
The consensus mark for revenues for this Zacks Rank #2 (Buy) company’s Computing and Graphics segment for the fourth quarter is pegged at $2.40 billion, which indicates an increase of 22.3% on a year-over-year basis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
However, slowing PC shipments’ trend in the fourth quarter of 2021, due to component shortage and supply chain constraints, is expected to have hurt AMD’s performance in the to-be-reported quarter.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.