Advanced Micro Devices Inc (AMD.O) on Tuesday projected higher fourth-quarter revenue than market expectations, betting on its ability to overcome a weak supply chain to meet strong demand for chips used in gaming consoles and data center servers.
The company has been redirecting supplies and focusing on selling only its most profitable chips in a bid to tide over the crisis. It has also gained market share from rivals by offering a new series of chips that outpace those from Intel Corp (INTC.O).
AMD said it expected current-quarter revenue of about $4.5 billion, plus or minus $100 million, compared with analysts’ average estimate of $4.25 billion, according to Refinitiv data.
It also raised its annual revenue growth forecast to 65% from 60%, after beating expectations for third-quarter sales.
The quarterly performance was driven by a 44% surge in the computing and graphics business that includes graphic chip sales to data centers and accounts for most of the revenue.
“The data center business has performed very well, and we see strong demand there,” Chief Executive Lisa Su said on a post-earnings call.
The PC market may be “flattish as we go from 2021 into 2022,” while demand for chips used in Microsoft Corp’s (MSFT.O) Xbox gaming console and Sony Corp’s (6758.T) PlayStation will stay strong, she said.
The company’s net income rose to $923 million, or 75 cents per share, in the quarter, from $390 million, or 32 cents per share, a year earlier.
Reporting by Tiyashi Datta in Bengaluru; Editing by Aditya Soni
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