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Advanced Micro Devices reported Q1 earnings after the close Tuesday on target after AMD has benefited from the Covid-19 work from home demand for loud computing data centers and increased PC sales but did not give a target for earnings per share sending the stock lower.

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Advanced Micro Devices, Inc. NASDAQ: AMD Reported Earnings After Close Tuesday

$0.18 Met $0.18 EPS  And Beat $1.79B v. $1.78 Billion Forecast in Revenue 

Earnings 

Advanced Micro Devices Inc (AMD) reported first quarter earnings of an adjusted 18 cents a share on sales of $1.79 billion in the March quarter. Analysts were looking for AMD earnings of 18 cents a share on sales of $1.78 billion. On a year-over-year basis, AMD earnings jumped 200% while sales climbed 40%.

AMD chief competitprs are NVIDIA (NVDA) and Intel.  Analysts will be keyed into GPU adoption rates of AI techniques and machine learning tools in industries like gaming, automotive and blockchain.  Strong adoption of EPYC server processors is another growth catalyst.

AMD has partnerships with major game developers including Ubisoft, Capcom and Rebellion to optimize their next generation of games on Radeon graphics in a most competitive marketplace. 

Advanced Micro Devices, Inc. NASDAQ: AMD

Market Reaction: After hours 53.69 −1.82 (-3.28%)

Highlights

"We executed well in the first quarter, navigating the challenging environment to deliver 40% year-over-year revenue growth and significant gross margin expansion driven by our Ryzen and Epyc processors," Chief Executive Lisa Su said

AMD's gross profit margin increased to 46% in the March quarter from 45% in the December quarter and 41% in the year-earlier period

Advanced Micro Devices Q1 2020 earnings.

Outlook

Su added, "While we expect some uncertainty in the near-term demand environment, our financial foundation is solid and our strong product portfolio positions us well across a diverse set of resilient end markets."

For the second quarter, AMD expects to generate sales of $1.85 billion, based on the midpoint of its outlook. Sales of Ryzen and Epyc processor sales are seen driving year-over-year revenue growth of 21%. It expects a gross margin of 44% in the quarter. It did not give a target for earnings per share. Wall Street was modeling AMD earnings of 21 cents a share on sales of $1.92 billion in the June quarter.

In the year-earlier period, AMD earnings were 8 cents a share on sales of $1.53 billion. For the full year, AMD expects revenue to grow about 25% from 2019 with a gross margin of about 45%. That's despite expectations of weaker consumer demand in the second half of the year stemming from fallout from the coronavirus pandemic.

 

Tesla AI Chip From AMD


Tesla Self DrivingAMD Artifical Intelligence Chips are used in Tesla autonomus driving

Tesla $TSLA has been developing an Articial Intelligance (AI) Chip for self driving car using $AMD intellectual property.Tesla's new chip will likely reduce its reliance on Nvidia $NVDA. $AMD spin-off GlobalFoundries CEO Sanjay Jha said it's working directly with Tesla on the chip. GlobalFoundries has a wafer supply agreement in place with AMD through 2020.

Tesla has over 50 employees involved in the project, including the head of Autopilot hardware and software Jim Keller. Keller joined Tesla in early 2016 following two stints at AMD and one at Apple. Keller is reknowned in the industry and his chips include the design of Apple's A4 and A5 iPhone chips.

Last September CNBC reported that sources say $TSLA has received back samples of the first implementation of its processor and is now running tests on it.Tesla CEO Elon Musk has promised that autonomous driving capability will be available to consumers in 2020. The key is a chip that power-efficient and able to harness AI to drive a car autonomusy. Current Tesla autopilot self-driving vehicles use Nvidia graphics processing units and Tesla has used chips from Mobileye (now part of Intel) before. The notorious $TSLA auto pilot accident last year was using Mobileye chips.

Source: AMD

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