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Advanced Micro Devices (AMD) to Post Q2 Earnings: What to Expect?

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Advanced Micro Devices AMD is set to release second-quarter 2022 results on Aug 2.

The company expects second-quarter 2022 revenues to be $6.5 billion (+/-$200 million), which indicates year-over-year growth of 69% and quarter-over-quarter improvement of 10%.

The Zacks Consensus Estimate for revenues is pegged at $6.52 billion, suggesting growth of 69.43% from the year-ago quarter’s reported figure.

The consensus estimate for second-quarter earnings is pegged at $1.03 per share, unchanged over the past 30 days. The figure indicates an improvement of 63.49% on a year-over-year basis.

AMD’s earnings beat the Zacks Consensus Estimate in all of the trailing four quarters, the earnings surprise being 18.53%, on average.

Advanced Micro Devices, Inc. Price and EPS Surprise

Advanced Micro Devices, Inc. Price and EPS Surprise
Advanced Micro Devices, Inc. Price and EPS Surprise

Advanced Micro Devices, Inc. price-eps-surprise | Advanced Micro Devices, Inc. Quote

Let’s see how things are shaping up for the upcoming announcement.

Factors Likely to Have Influenced Q2 Earnings

AMD’s second-quarter results are expected to benefit from strong demand for EPYC processors thanks to adoption by the likes of Amazon AMZN and Google Cloud.

Amazon’s cloud platform, Amazon Web Services (AWS), is using AMD third-generation EPYC processors in the latest Amazon EC2 M6a instances.

Meanwhile, Google Cloud is using EPYC processors to power the new C2D virtual machine (“VM”).

AMD’s EPYC processors have also been used in developing several high-performance computing systems. It is worth mentioning that AMD powers five of the top ten most powerful and eight of the top ten most energy-efficient supercomputers globally. Partnerships with the likes of IBM and Hewlett Packard HPE are worth mentioning in this regard.

AMD has partnered with Hewlett Packard and the U.S. Department of Energy’s Oak Ridge National Laboratory to build the world’s fastest and most energy-efficient supercomputer, Frontier.

AMD has been riding on higher sales of its Ryzen and Radeon processors, owing to the increasing proliferation of AI and Machine Learning in industries like cloud gaming and the supercomputing domain.

The chipmaker is also likely to have gained from steady momentum witnessed in the adoption of Ryzen, Radeon and semi-custom processors. These processors are being heavily utilized in the cloud, gaming, PC and data center verticals, driven by work-from-home and online-schooling trends due to the pandemic.

AMD has been constantly enhancing the performance of its Ryzen processors to help address the rising demand for its Ryzen processors, courtesy of the increasing proliferation of AI and Machine Learning (ML) in industries like cloud, gaming and data centers.

AMD's top line is expected to have benefited from its acquisition of Xilinx. The buyout has expanded AMD's technology and product portfolio and added multiple high-margin long-term revenue streams across a new set of markets such as AI and Augmented Reality (AR).

The acquisition has helped AMD collaborate with Meta Platforms META to enter the Metaverse.

This Zacks Rank #3 (Hold) company has become Meta's ecosystem partner, and its radio chip Xilinx Zynq UltraScale RFSoC will be utilized to develop a Metaverse-ready radio access unit. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Key Q2 Developments

During the to-be-reported quarter, AMD announced the launch of Ryzen Embedded R2000 Series, second-generation mid-range system-on-chip (SoC) processors optimized for a wide range of industrial and robotics systems, machine vision, IoT and thin-client equipment.

Moreover, AMD announced that it is expanding its multi-generational CPU core, graphics, and adaptive computing architecture roadmaps with new product launches. Some of the notable product launches include the Zen 4 CPU, the Zen 5 CPU (2024) and the AMD RDNA 3 gaming architecture.

AMD announced that it will acquire Pensando for approximately $1.9 billion before working capital and adjustments to expand its data center solutions capabilities during the to-be-reported quarter.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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