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

Advanced Micro Devices AMD is set to release second-quarter 2021 results on Jul 27.

The company expects second-quarter 2021 revenues to be $3.6 billion (+/-$100 million), which indicates year-over-year growth of 86% and quarter-over-quarter improvement of 4%.

For second-quarter 2021, AMD expects robust sales across all its businesses to drive year-over-year increase in revenues. Meanwhile, the sequential increase is projected to be led by growth across data center and gaming verticals.

The Zacks Consensus Estimate for revenues is pegged at $3.62 billion, suggesting growth of 87.4% from the year-ago quarter’s reported figure.

The consensus estimate for second-quarter earnings is pegged at 54 cents per share, unchanged over the past 30 days. The figure indicates an improvement of 200% on a year-over-year basis.

Factors Likely to Have Influenced Q2 Earnings

AMD’s second quarter results are expected to have benefited from strong demand for EPYC processors. In first-quarter 2021, the company reported record server processor revenues as EPYC processor sales more than doubled on a year-over-year basis and grew by a strong double-digit percentage, sequentially.

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

The chipmaker is also likely to gain 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.

The expanding clientele is also expected to have driven AMD’s growth. The company’s EPYC processors are now used by leading cloud players, including Hewlett Packard Enterprise HPE, Amazon Web Services (AWS), Alphabet GOOGL division Google Cloud and Microsoft’s MSFT Azure.

In fact, this Zacks Rank #2 (Buy) company’s EPYC 7003 series processors are now powering the new Perlmutter supercomputer at Lawrence Berkeley National Laboratory. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Strong PC shipments’ trend in the second quarter of 2021, driven by increased demand for notebooks, is expected to have favored AMD’s performance in the to-be-reported quarter. Per IDC data, PC shipments in second-quarter 2021 improved 13.2% year over year to 83.6 million units. This is expected to have driven second-quarter 2021 top line.

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