Advanced Micro Devices Inc. shares rose Wednesday, as analysts described the chip maker’s earnings report as “a potential watershed moment” that proved AMD is a data-center powerhouse following its acquisition of Xilinx Inc.
Acquiring Xilinx brought in so-called field-programmable gate array, or FPGA, chips that can be configured by a customer or a designer after they are made. Those chips, in turn, are used as accelerators in data centers to boost computing power and improve power efficiency in existing physical spaces.
In data-center sales, comparing “the entire datacenter businesses at each company,” Caso said AMD gained two points, more than doubling revenue and giving it 18% market share, as Intel’s data-center revenue improved 22% despite the two-point loss. AMD reported gross margins of 48% for the first quarter, up from 46% in the year-ago quarter, but down from 50% in the fourth quarter. Without Xilinx, AMD’s gross margin was 51%. AMD, however, hiked its gross margin forecast for the year to 54%, up from a previous 51%, while Intel is forecasting 52% for the year.
Jefferies analyst Mark Lipacis, who has a buy rating and raised his price target to $155 from $145, said he thinks AMD’s July 9 analyst day will be a potential catalyst.
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