AMD’s robust outlook, as well as Street beating Q4 earnings, has shares in the chipmaker soaring in pre-market trading Wednesday.
Advanced Micro Devices (AMD) – Get Advanced Micro Devices, Inc. Report shares soared higher in pre-market trading after the chipmaker posted record fourth quarter earnings and issued a bullish sector forecast for the coming year.
AMD said 2022 revenues should come in north of $21.5 billion, a 30% increase from last that that is also well ahead of the Refinitiv forecast of $19.25 billion, thanks to surging demand for its data center chips.
For the three months ending in December, AMD posted earnings of 92 cents per share, topping Street forecasts by 16 cents, on adjusted revenues of $4.83 billion. Over the whole of 2021, in fact, cloud and enterprise server chip sales more than doubled, leading in part to the optimism underpinning the 2022 sales guidance.
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“We made outstanding progress in the last year. We exit 2021 with data center revenue contributing a mid-20s percentage of overall revenue,” CEO Lisa Su told investors on a conference call late Tuesday. “And we expect 2022 to be another year of significant growth based on the strong customer demand signals for our current and next generation products.”
AMD shares were marked 12.33% higher in pre-market trading Wednesday to indicate an opening bell price of $131.18 each, a move that would extend the stock’s six-month gain to around 22%.
“Nothing ‘micro’ about the results and guidance,.” said BMO Capital Markets analyst Ambrish Srivastava, who lifted his price target on the stock to $130 per share while holding his ‘market perform’ rating in place.
“With all sorts of challenges when it comes to securing supply. AMD delivered a big beat and a raise and is guiding for very strong growth in 2022 … which appears balanced and moored on continued strong growth/share gains in servers, followed by game consoles, graphics and PCs,” he added.
Last week, AMD got another boost when China’s State Administration for Market Regulation gave its nod to the chipmaker’s $35 takeover of Xilinx (XLNX) – Get Xilinx, Inc. Report, provided the groups agree not to force so-called ‘tie-in’ sales nor discriminate against customers that mix-and-match semiconductor purchases.
Xilinx’s data-center chips have become much more valuable in the wake of the global pandemic, triggered in part by a surge in work-from-home dynamics that have pressured companies around the world to improve their technology and storage capabilities.
Xilinx posted record sales of just over $1 billion in the the three months ending in December, its fiscal third quarter, adding late Wednesday that its bottom line came in at a Street-beating $1.29 per share.
