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Will EPYC Deal Wins & Product Rollouts Aid AMD's Q1 Earnings?
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Advanced Micro Devices (AMD - Free Report) is slated to release first-quarter 2020 results on Apr 28.
Ongoing momentum in Ryzen, Radeon and EPYC products are expected to have the to-be-reported quarter’s performance. Further, robust demand for graphic processor units (GPUs), which are now widely utilized in industries like gaming, automotive and blockchain, is likely to get reflected in the first-quarter results.
Notably, strength in Computing and Graphics segment drove year-over-year improvement in the fourth quarter amid softness in Semi-Custom vertical, a trend that is anticipated to have continued in the first quarter.
Notably, the Zacks Consensus Estimate for Computing and Graphics segment for the first quarter is pegged at $1.352 billion, indicating an improvement of 62.7% from the year-ago reported figure.
Meanwhile, the consensus mark for Enterprise, Embedded and Semi-Custom segment for the first quarter is pegged at $566 million, indicating a decline of 6.3% from the year-ago quarter.
Click here to know how the company’s overall Q1 performance is expected to be.
EPYC Deal Wins Remain Noteworthy
Server revenues are anticipated to have improved sequentially in the first quarter, owing to ongoing momentum witnessed by second-generation EPYC processors. The company has garnered new deal wins from major enterprise, cloud, and HPC companies.
Latest EPYC deal wins in supercomputing domain includes a contract from the European Centre for Medium-Range Weather Forecasts (ECMWF). Per the deal, AMD’s EPYC 7742 server processors will be utilized to accelerate ECMWF’s meteorological supercomputer, which is powered by Atos’s advanced BullSequana XH2000 technology.
Moreover, the company’s second generation EPYC processors and Radeon Instinct MI25 GPUs have been selected by Microsoft’s (MSFT - Free Report) Azure division to power its NVv4 virtual machines (VMs). Further, the company’s EPYC processors utilized by Google Cloud accelerated the beta availability of N2D virtual machines (VMs) on Google Compute Engine during the first quarter.
Further, AMD announced a multi-year partnership with Mercedes-AMG Petronas Formula One Team. The team will make use of the company’s commercial solutions like EPYC server processors and Ryzen PRO laptop processors to optimize their workstreams.
Increasing popularity of the company's products instill investor confidence in the stock. Notably, shares of AMD have gained 22.5% year to date, against the industry’s decline of 5.6%.
Higher EPYC server processor sales and momentum in deals wins are expected to have contributed to the first-quarter Enterprise, Embedded and Semi-Custom revenues.
However, sluggishness in Semi-Custom vertical is likely to have limited first-quarter segmental revenue growth.
Product Roll Outs Bode Well
Incremental revenues generated from Radeon RX 5700 graphics card and third generation AMD Ryzen desktop processors are likely to have contributed to the first-quarter performance. Management also remains optimistic regarding growing clout of Ryzen 4000 mobile processors families across leading OEMs.
During the first quarter, AMD rolled out Radeon Pro W5500 workstation graphics card for design and engineering professionals. It also announced the AMD Radeon Pro W5500M GPU to power next-generation, professional mobile workstations.
Further, AMD introduced Ryzen Threadripper 3990X desktop processor featuring 128 threads and 64 cores. The new Ryzen Threadripper processor has been developed on Zen core architecture utilizing 7 nm process technology. Higher core count of Threadripper 3990WX is expected to have strengthened its competitive position against Intel (INTC - Free Report) in the high-end desktop market (HEDT).
Additionally, AMD’s latest Radeon Pro 5300M and 5500M mobile GPUs based on 7 nanometer (nm) RDNA architecture have been implemented in Apple’s (AAPL - Free Report) latest MacBook Pro to enable advanced graphics performance.
Strong adoption of new processors is likely to get reflected in Computing and Graphics first-quarter revenues.
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Image: Bigstock
Will EPYC Deal Wins & Product Rollouts Aid AMD's Q1 Earnings?
Advanced Micro Devices (AMD - Free Report) is slated to release first-quarter 2020 results on Apr 28.
Ongoing momentum in Ryzen, Radeon and EPYC products are expected to have the to-be-reported quarter’s performance. Further, robust demand for graphic processor units (GPUs), which are now widely utilized in industries like gaming, automotive and blockchain, is likely to get reflected in the first-quarter results.
However, deteriorating trend in PC shipments in first quarter, due to coronavirus crisis-induced supply constraints, is likely to have weighed on the company’s performance in the to-be-reported quarter.
Notably, strength in Computing and Graphics segment drove year-over-year improvement in the fourth quarter amid softness in Semi-Custom vertical, a trend that is anticipated to have continued in the first quarter.
Notably, the Zacks Consensus Estimate for Computing and Graphics segment for the first quarter is pegged at $1.352 billion, indicating an improvement of 62.7% from the year-ago reported figure.
Meanwhile, the consensus mark for Enterprise, Embedded and Semi-Custom segment for the first quarter is pegged at $566 million, indicating a decline of 6.3% from the year-ago quarter.
Advanced Micro Devices, Inc. Revenue (Quarterly)
Advanced Micro Devices, Inc. revenue-quarterly | Advanced Micro Devices, Inc. Quote
Click here to know how the company’s overall Q1 performance is expected to be.
EPYC Deal Wins Remain Noteworthy
Server revenues are anticipated to have improved sequentially in the first quarter, owing to ongoing momentum witnessed by second-generation EPYC processors. The company has garnered new deal wins from major enterprise, cloud, and HPC companies.
Latest EPYC deal wins in supercomputing domain includes a contract from the European Centre for Medium-Range Weather Forecasts (ECMWF). Per the deal, AMD’s EPYC 7742 server processors will be utilized to accelerate ECMWF’s meteorological supercomputer, which is powered by Atos’s advanced BullSequana XH2000 technology.
Moreover, the company’s second generation EPYC processors and Radeon Instinct MI25 GPUs have been selected by Microsoft’s (MSFT - Free Report) Azure division to power its NVv4 virtual machines (VMs). Further, the company’s EPYC processors utilized by Google Cloud accelerated the beta availability of N2D virtual machines (VMs) on Google Compute Engine during the first quarter.
Further, AMD announced a multi-year partnership with Mercedes-AMG Petronas Formula One Team. The team will make use of the company’s commercial solutions like EPYC server processors and Ryzen PRO laptop processors to optimize their workstreams.
Increasing popularity of the company's products instill investor confidence in the stock. Notably, shares of AMD have gained 22.5% year to date, against the industry’s decline of 5.6%.
Higher EPYC server processor sales and momentum in deals wins are expected to have contributed to the first-quarter Enterprise, Embedded and Semi-Custom revenues.
However, sluggishness in Semi-Custom vertical is likely to have limited first-quarter segmental revenue growth.
Product Roll Outs Bode Well
Incremental revenues generated from Radeon RX 5700 graphics card and third generation AMD Ryzen desktop processors are likely to have contributed to the first-quarter performance. Management also remains optimistic regarding growing clout of Ryzen 4000 mobile processors families across leading OEMs.
During the first quarter, AMD rolled out Radeon Pro W5500 workstation graphics card for design and engineering professionals. It also announced the AMD Radeon Pro W5500M GPU to power next-generation, professional mobile workstations.
Further, AMD introduced Ryzen Threadripper 3990X desktop processor featuring 128 threads and 64 cores. The new Ryzen Threadripper processor has been developed on Zen core architecture utilizing 7 nm process technology. Higher core count of Threadripper 3990WX is expected to have strengthened its competitive position against Intel (INTC - Free Report) in the high-end desktop market (HEDT).
Additionally, AMD’s latest Radeon Pro 5300M and 5500M mobile GPUs based on 7 nanometer (nm) RDNA architecture have been implemented in Apple’s (AAPL - Free Report) latest MacBook Pro to enable advanced graphics performance.
Strong adoption of new processors is likely to get reflected in Computing and Graphics first-quarter revenues.
Zacks Rank
AMD currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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