AMD Micro Wobbles On Earnings After Misses Revenue Forecast


Summit Insight Group analyst Kinngai Chan upgraded shares of AMD from Hold to Buy

AMD’s computing and graphics fourth-quarter sales rose 30% quarter-over-quarter, thanks to client CPU market share gains and new GPU product launch, Chan said in a note. Weakness in game console business led to a sequential decline in revenues at its Enterprise, Embedded, and Semi-Custom business but gross margin expanded to 45% on favorable product mix.

Chan believes AMD gained significant market share in PCs in 2019 at its corporate average margin. Helped by sales of 7nm server CPUs, AMD will likely take share from Intel

The analyst expects gross margin expansion to accelerate through 2020 due to a higher contribution from its Server/data center business.

“While the risk of Intel price aggression remains, we believe AMD’s design wins in the server/datacenter has hit a critical mass and should give AMD plenty of gross margin leverage through 2020,” Chan wrote in a