Shares of AMD Rose Thanks to Q2 2021 Earnings Report

Shares of Advanced Micro Devices (AMD) rose on July 28 as well as July 29, after the company reported Q2 2021 earnings that surpassed expectations. Analysts expected earnings of 54 cents a share from revenue of $3.6 billion, AMD instead reported $0.63-per-share profit and sales of $3.85 billion.

The semiconductor industry reported a net income of $710 million, which amounts to 58 cents a share. Last year, AMD reported a net profit of $157 million, or 13 cents a share. Adjusted for stock compensation, among other items, earnings came in at 63 cents a share for the quarter. The company’s revenue nearly doubled to $3.9 billion.

AMD reported that revenue at its enterprise and semi-custom segment rose 183% from a year earlier to $1.6 billion. The jump was in part due to AMD’s server chips and another factor also helped to reach great results. The company’s sales of chips made for videogame consoles sold by Microsoft as well as Sony.

Separately Tuesday, Microsoft issued fiscal fourth-quarter earnings and quarterly revenue guidance that surpassed expectations. The company’s revenue jumped 21% year over year in the quarter, which ended one month ago. Net income rose 47% in the quarter.

The company said that its Xbox hardware revenue jumped 172%. The higher price and greater number of units sold of its next-generation videogame consoles played a crucial role in the company’s success. In the fiscal fourth quarter, its Intelligent Cloud segment produced $17.38 billion in revenue, up 30% year over year.

AMD and the severe shortage of semiconductors

Its computing, as well as graphics segment, accounted for second-quarter revenue of $2.3 billion. The semiconductor company’s central and graphics processors commanded higher average prices, boosting the revenue as AMD sold more of its high-end semiconductors.

Given the shortage of semiconductors around the world, investors expected big beats. They also expected upbeat forecasts from chip companies. Interestingly, AMD delivered on both expectations. The company told investors it now expects its annual revenue to grow 60%, AMD previously expected its annual revenue to grow 50%. The semiconductor’s Tuesday guidance suggests it will achieve full-year revenue of more than $15 billion.

For the third quarter, the company stated that it expects revenue of roughly $4.1 billion. AMD said revenue growth would be driven by its data-center as well as videogame businesses. The company did not issue per-share earnings guidance.