(Bloomberg) — Advanced Micro Devices Inc. gave an optimistic third quarter earnings forecast, indicating Intel Corp.’s market share gains. in the lucrative server chip market.
AMD, the second-largest computer processor maker after Intel, projected third-quarter revenue to be about $4.1 billion, plus or minus $100 million. Analysts had forecast an average revenue of $3.8 billion. The company also raised its annual outlook and now expects sales to rise 60% from a previous forecast of 50%.
Chief Executive Officer Lisa Su has brought the company back from the brink of irrelevance with a series of new products that customers see as competitive with Intel’s offerings for the first time in years. Investors have been pouring money into AMD’s stock for the past five years, expecting Su’s changes to lead to higher market share and higher profits. However, the stock is down about 2% this year, compared to the 13% gain of the Philadelphia Stock Exchange Semiconductor Index, as the market looks for evidence of continued progress.
“We are growing significantly faster than the market with strong demand across all our businesses,” Su said in a statement.
AMD’s earnings report Tuesday indicates that the company is gaining market share at the expense of Intel. Intel, the world’s largest manufacturer of superconductors, reported a 6% drop in revenue in the second quarter. AMD also competes with Nvidia Corp. in the market for graphics processors used in gaming PC cards.
Santa Clara, California-based AMD reported second-quarter earnings more than tripled to $710 million, or 58 cents per share, better than analyst estimates. Sales rose 99% to $3.8 billion.
AMD shares rose 2.2% in extended trading after the announcement after closing at $91.03 in New York.
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