AMD’s (ADSK -1.21%) record-breaking success continues. The firm announced earnings this week following the closing bell, and CEO Lisa Su said revenue of $6.55 billion was recorded in the Q2 of 2022, up 70 percent y/y. The acquisition of fellow processor maker Xilinx in February, as well as organic growth, assisted the company’s rapid development. Data center sales increased by 83 percent compared to last year, according to AMD.
Cloud computing’s growth is continuing to accelerate, and data center upgrades are rising in response. These essential cloud computing components are one of the most important reasons to be bullish on AMD stock right now. Is it still a good investment after the Q2 report
Led by data centers and other industrial applications
Beginning in Q2 2022, AMD is aligning its business segments for accounting purposes. With the large merger with Xilinx now completed, a new division dubbed “embedded segment” was established to account for corporate end markets that Xilinx had previously handled separately. AMD’s catch-all for company applications of its chips has been broken out into a separate enterprise unit that is called “data center segment.”
The most significant improvements in Q2 were in these areas. Embedded, which includes networking, automotive, and other industrial uses from Xilinx, expanded 2,228 percent y/y to $1.26 billion. However, the majority of this boost came from Xilinx. When compared to the same period last year (when revenue was just $879 million for Xilinx), acquiring another company would have resulted in a 35% increase as a standalone business operating income of 51 percent of segment sales
Sales from the data center, on the other hand, have exploded. Data center sales increased 83 percent to $1.49 billion, with AMD’s EPYC CPUs for servers (a computing unit inside a data center designated for a specific task) again driving demand. Additionally, operating income was strong at 32% of segment sales.
AMD has been focusing on data centers in recent years as it takes market share from archrival Intel (INTC 1.42%). The two designers have divided up the market between them as they cut into Intel’s considerable lead. In Q2, Intel reported a 16 percent year-over-year drop in its comparable AI and data center sales, taking in $4.6 billion from that division alone.
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