Home / Technology / AMD earnings: In a weakening chip sector, AMD brings rare optimism

AMD earnings: In a weakening chip sector, AMD brings rare optimism

Advanced Micro Devices Inc. is about to get its turn to show if it is affected by problems in the chip market, or if it is to capitalize on the weakness and siphon off market share from larger rival Intel Corp. [19659002] AMD

                                     AMD, + 0.80%

This is an article in this magazine

                                     INTC, -8.99%

which saw its shares plummet Friday following a very scaled-back "cautious" outlook for the year. Back in January, AMD had a forecast for a weak first quarter but with optimistic outlook 201

9, when the chip maker said it expected "high single digit revenue growth" for the year when the street looked for 6% growth.

AMD chief executive Lisa Su wants to make her silent believe AMD can actually live up to that forecast.

Opinion: Tech giants made so much money in 2018 that 2019 is bound to look pretty bad

Amber analyst Stacy Rasgon, who has a market rating and a $ 16 price target on AMD, said the company's forecast

"That being said, the key near-term controversy pertains to the achievability of that outlook," Rasgon said.

AMD has already benefited from central processing unit shortages from Intel, according to reports from IDC and Gartner, so that AMD's first quarterback wants to be "weak". Santa Clara, Calif. -Based AMD so got a big boost in March when Alphabet Inc.'s

                                     GOOG, + 0.69%

GOOGL, + 0.80%

Google said its Stadia streaming video game service would be powered by custom AMD chips.

Earnings: Of the 28 analysts surveyed by FactSet, AMD on average in the year-ago period and down from the 8 cents at the beginning of the quarter. 7 cents a share.

Estimize, a software platform that uses crowdsourcing from hedge funds executives, brokerages, buy-side analysts and others. Revenue: Wall Street expects revenue of $ 1.27 billion from AMD, according to 28 analysts polled by FactSet. That's down from the $ 1.49 billion expected at the start of the quarter and from the year-ago period's $ 1.65 billion. Estimize Expects Revenue of $ 1.29 Billion.

Analysts surveyed by FactSet Decreased to $ 855.6 million from the year ago ] Stock movement: AMD shares have rallied 45% since the company's previous earnings report in late January, while the PHLX Semiconductor Index

                                     SOX, -0.83%

has gained 25% since late January, the S & P 500 index

                                     SPX, + 0.47%

is up 11%, and the tech-heavy Nasdaq Composite Index

                                     COMP, + 0.34%

is up 16%.

What analysts are saying

Instinet analyst David Wong, who started coverage on AMD with a buy rating in early April, said he was in the chip maker's business because of "solid" positioning in both the CPU and graphics processing units, which is Intel and Nvidia Corp.

                                     NVDA, -4.72%

dominate, respectively.

"Though the near-term GPU outlook remains messy until July and probably weighs on 1H19 results / guidance, we are more confident in AMD's 7nm x86 Intel's mid-year product launches near the end of the month, "Cowen analyst Matthew Ramsay said in a recent note. Ramsay has a buy rating and a $ 33 price target on AMD.

See also: The promise of a magical rebound for tech comes with little evidence to back it up

AMD's PC-CPU share Low-to-mid-teens over the next few quarters, with more AMD programs ramping up in 2H19, "said Jefferies analyst Mark Lipacis in a recent note.

"Intel's mis-execution on 10nm appears to be a supply to the supply chain." Lipacis has a buy rating and a $ 34 price target on AMD.

Of the 36 analysts who cover AMD, 15 have buy or overweight ratings, 16 have hold ratings and five have or underweight ratings, with an average price target of $ 24.70 .

Get the top tech stories of the day delivered to your inbox. Subscribe to MarketWatch's free tech daily newsletter. Sign up here.

Source link