AMD Stock Flys High After Best Earnings In 7 Years

Posted by at 8:45 am on July 26, 2018

Advanced Micro Devices  shares rose in the extended session Wednesday after the chip maker’s quarterly results topped Wall Street estimates on strong revenue gains and its best earnings in seven years.

AMD, +14.08% shares advanced 4.9% after hours, after closing down 0.9% at $16.05 in the regular session.

“We had an outstanding second quarter with strong revenue growth, margin expansion and our highest quarterly net income in seven years,” President and Chief Executive Lisa Su said in a statement.

One area of quick growth has been with the company’s Epyc data-center graphics processing unit (GPU), which has been out for a year. On a conference call, Su said there was no question that data-center sales of Epyc were growing very quickly even though the size of the business now is still small. The CEO said AMD plans to re-invest “heavily” in the business to grow it out over the next four to eight quarters.

“There’s no question that the demand for GPUs in the data center is growing quickly,” Su said on the call. “Our focus on the GPU side is very cloud centric.”

Recently, AMD’s Epyc chip was adopted by Cisco Systems Inc. CSCO, +1.03% and Hewlett Packard Enterprise Co. HPE, +1.68% for their makes of servers.

The chip maker reported second-quarter net income of $116 million, or 11 cents a share, compared with a loss of $42 million, or 4 cents a share, in the year-ago period. Adjusted earnings were 14 cents a share.

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