Chip giant AMD released its second-quarter financial report last night. As always, the performance exceeded market expectations. Under the positive financial report, AMD’s stock price rose slightly by 1% after the market. The magnitude seems to be uncomfortable with the earnings report that exceeded expectations, but it is not difficult to understand, after all, earnings reports have become AMD’s tradition.
Screenshot from Tiger Securities
Net profit soared by 352%, AMD continues to raise its profit forecast
Before the release of the second quarterly report, AMD’s guidance was $3.6 billion in revenue, with a float of $100 million and a gross profit margin of 47%. Bloomberg analysts unanimously expected revenue of 3.613 billion. After the report card was announced, AMD’s actual revenue in the second quarter was US$3.85 billion, a year-on-year increase of 99.3%, and its gross profit margin was 48%, both exceeding expectations.
AMD’s revenue structure is divided into two types of sources. One is the computing and graphics business , including the sales of CPU and GPU for desktop and notebook computers; the other is the enterprise, embedded and semi-custom business , including data centers and games. Machine income.
The computing and graphics business achieved $2.25 billion in revenue in the second quarter, a year-on-year increase of 64.6%, far exceeding the growth rate of the previous four quarters.
The reason for driving revenue growth is the increase in volume and price. Due to the rich combination of Ryzen desktop and notebook processors, the ASP (average selling price) of client processors has increased year-on-year and month-on-month, and the average price of high-end Radeon graphics cards has also increased. .
The enterprise, embedded and semi-custom business achieved revenues of US$1.6 billion in the second quarter, a year-on-year increase of 183% and a month-on-month increase of 19%. The growth was driven by the increase in EPYC processor revenue and sales of semi-custom products.
The increase in volume and price also brought about an explosion of profitability. In the second quarter, AMD’s net profit was US$710 million, a surge of 352% year-on-year, and the net profit margin reached 18.4%.
Regarding the second quarter results, AMD CEO Su Zifeng said: “Our business performed exceptionally well in the second quarter. Revenue and operating profit margin doubled, and profitability (non-GAAP net profit) increased by two year-on-year. Times more. Due to the strong demand for all our businesses, our growth rate is significantly faster than the market. We now expect that, driven by strong execution and customer preference for our leading products, our annual revenue in 2021 will increase year-on-year About 60% .”
AMD outsourcing vs Intel self-produced: those who get the technology get the share
AMD’s renaissance is based on iterations of technological strength. Unlike its rival Intel, which obsessively produce chips by itself, AMD outsources it to TSMC. Focusing all its energy on technology rather than production, AMD’s products began to erode Intel’s market share.
Su Zifeng said in an interview, “Generation after generation, we must improve technical standards. If we do this, we can continue to increase our share.”
Last year, the application of AMD’s products in the world’s top 500 supercomputers increased by 5 times year-on-year; Google Cloud took the lead in adopting the third-generation AMD EPYC processor with a performance increase of 56%; Tesla is using AMD Ryzen embedded processors and AMD RDNA 2 based GPUs power the infotainment systems of the new Tesla Model S and Model X cars.
According to PassMark data, AMD’s market share in all CPUs reached 44.1% in the second quarter, while Intel dropped from 82.5% at its peak to 55.8%.
Different from AMD’s focus on improving technical strength, Intel’s new CEO has announced an increase in chip foundry business after taking office. In March of this year, Intel announced that it would spend 20 billion US dollars to build two chip factories in Arizona, USA. In July of this year, it was reported that Intel was in negotiations with the professional chip manufacturer Global Foundries ( Global Foundries ) , the purchase amount may reach 30 billion US dollars, and Global Foundries was split from AMD in 2008.
The difference in strategic choice may help AMD maintain its technological leadership. Su Zifeng said at the financial report that even if the market for personal computers declines in 2022, AMD can continue to grow. She expects that the company’s competitive situation will be very good, and AMD also needs to do better.
Advanced product technology has not only brought about a surge in revenue and net profit, whether it is AMD’s cash or the ongoing $4 billion repurchase program, strong financial data will allow AMD to be aggressive in the days to come.
The growth rate of performance in the third quarter will slow down but still exceed expectations. The acquisition of Xilinx has aroused market attention
For the third quarter results, AMD’s guidance is as follows:
- Revenue in the third quarter is expected to be approximately US$4.1 billion, with a fluctuation of US$100 million, a year-on-year increase of approximately 46% and a month-on-month increase of approximately 6%.
- The year-on-year revenue growth will be driven by the growth of all businesses, and the quarter-on-quarter growth is expected to be mainly driven by the growth of data center and gaming businesses.
- AMD expects the non-GAAP gross profit margin in the third quarter to be approximately 48%.
Driven by the strong growth of all businesses, AMD now expects full-year revenue growth of about 60% in 2021, which is higher than the previous forecast of 50%. AMD now expects the non-GAAP gross profit margin for the full year of 2021 to be approximately 48%, which is higher than the previous forecast of 47%.
The momentum of AMD’s rapid growth in the first half of the year cannot be maintained for a long time. Even if the growth rate of performance in the third quarter will slow down, it still exceeds market expectations.
In addition to the performance forecast, the market is also very concerned about AMD’s acquisition of Xilinx, which has now been approved by the British regulatory agencies and the European Union. Currently accepting China’s approval, AMD still expects to complete the acquisition by the end of this year.
AMD’s second-quarter financial report once again exceeded market expectations. Although the stock price performance is not hot enough, it still cannot prevent AMD from revealing aggressive momentum in every financial data.
On the one hand, AMD’s success is due to its own efforts. On the other hand, its competitor Intel sticks to chip manufacturing and insists on the IDM model not to let go, which hinders the application of advanced technology to a certain extent.
Looking to the future, AMD is expected to usher in a more glorious moment under the leadership of Su Zifeng.
This article was published in the Tiger Securities Community, which is a community section of Tiger Trade, a stock trading software owned by Tiger Securities
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/kill-crazy-amds-net-profit-soared-by-352-and-beat-intel/
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