AMD Posts Upbeat Q4 Results; Street Says Buy

Semiconductor company Advanced Micro Devices, Inc. (NASDAQ: AMD), popularly known as AMD, has reported better-than-expected results for the quarter ended December 25, 2021. The strong results were driven by the robust growth witnessed in revenues.

Following the upbeat earnings, shares of the company reacted positively and rose 10.5% to close at $128.99 in Tuesday’s extended trading session.

Revenue & Earnings

AMD reported quarterly revenues of $4.83 billion, up 49% from the prior year’s figure of $3.24 billion. Further, the figure topped the consensus estimate of $4.52 billion. The strong growth in revenues was driven by the 75% and 32% year-over-year rise witnessed in revenues from the Enterprise, Embedded and Semi-Custom segment and Computing and Graphics segment, respectively.

The company reported quarterly earnings per share (EPS) of $0.92, up 77% from the previous year. Further, the figure surpassed the consensus estimate of $0.76.

Other Operating Metrics

The company’s gross margin and operating margin increased 5% and 7% from the previous year to 50% and 27%, respectively.

Further, the company generated cash from operations of $822 million during the quarter, compared to $554 million a year ago.

Outlook

The company also provided its revenue outlook for the first quarter and full-year 2022.

In the first quarter, the company expects revenues to be in the range of $4.9 billion to $5.1 billion against the consensus estimate of $4.32 billion. For the full year, the company forecasts revenues of $21.5 billion. The consensus for the same is pegged at $19.27 billion.

Management Commentary

The CEO of AMD, Dr. Lisa Su, said, “2021 was an outstanding year for AMD with record annual revenue and profitability. Each of our businesses performed extremely well, with data center revenue doubling year-over-year driven by growing adoption of AMD EPYC processors across cloud and enterprise customers. We expect another year of significant growth in 2022 as we ramp our current portfolio and launch our next generation of PC, gaming and data center products.”

Stock Rating

Consensus among analysts is a Strong Buy based on 12 Buys and 4 Holds. The average AMD stock prediction of $156.64 implies upside potential of 34.1% from current levels. Shares have gained 31.4% over the past year.

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