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All hopes for AMD are now resting on the holiday season



Advanced Micro Devices Inc. puts all its chips in one basket: Christmas time.

AMD announced on Tuesday scheduled second-quarter results, but also gave a disappointing third-quarter guidance as sales of its custom chips for video game consoles continue to decline. AMD

AMD, + 1.16%

Equities fell more than 4% in over-the-counter trading, after rising 83% in 2019, the second-largest gain over the previous year. Date in the S & P 500 Index

SPX, -0.26%

These increases are due to AMD promising a better second half of the year. This is a widespread blackout for chip makers this year, which has yet to be proven as several factors have combined to bring down the semiconductor market, including an oversupply of memory chips and a purchase slowdown by cloud computing companies. AMD's forecast assumes that this recovery, with the latest versions of chips for PCs, servers and data centers providing a significant boost in the fourth quarter, will increase.

Related: Microsoft kills it in all companies except one. Console sales lie. Overall, AMD expects revenue growth in the "mid single-digit percentage range".

"What you should expect in the transition from Q3 to Q4 is that the product mix gets better," AMD CEO Lisa Su said when asked an analyst about a massive uptrend in the fourth quarter.

However, improving the product mix does not seem to be enough to lure AMD into its promised land. In two quarters, the company's sales were 17.6% below the previous year's level. When AMD reaches the middle of its third-quarter revenue forecast, it will reach the fourth quarter, outperforming the previous year's revenue by 9%. This can make up for a bit, although the comparison after the drop in the cryptocurrency at the end of last year has become easier.

"It's a big ramp," Bernstein research analyst Stacy Rasgon said bluntly in an interview Tuesday afternoon Rome, which is due to hit the market next week after the introduction of new CPU chips. While server chips have a longer sales cycle, they will bring more revenue and profit, and ultimately provide a new source of revenue in an area where AMD has been absent for several years, until it brings its new family of chips based on its Zen to market Architecture.

More from Therese: Even Intel does not seem to know what's going to happen to Intel. If you want to be bullish, you can count on it, "Rasgon said, pointing out that AMD has bought an additional $ 100 million from Samsung Electronics Co. Ltd. includes.

005930, -2.58%

in the estimate of revenue growth of 20% after a recent deal with the South Korean company on graphics chips.

While it's okay to be optimistic about AMD's new PC and server chips, the expectation that these products will magically revolve around the AMD year in the last three months of sales is one Amount. If you bet that AMD is keeping that promise, you need to know that it needs to be performed perfectly to succeed, and external forces may still be in the way.


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