Advanced Micro Devices, Inc. (NASDAQ: AMD), operates as a semiconductor company worldwide. It operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom.
The Global Semiconductor Alliance appointed its first woman ever to chair its board on Tuesday. GSA appointed Lisa Su, the chief executive and president of Advanced Micro Devices Inc. as its new chairwoman, the trade group said. Simon Segars, who is CEO of SoftBank Group’s Arm Holdings, was appointed vice chair.
Recent Events
October 30, 2018. Offering fast, powerful, and fluid graphics performance, AMD unveiled new AMD Radeon™ Vega Mobile graphics processors for next-generation notebooks — including the AMD Radeon™ Pro Vega 20 and Radeon™ Pro Vega 16 graphics, which will be available as configuration options on Apple’s 15-inch MacBook Pro starting late November. https://finance.yahoo.com/news/amd-radeon-vega-mobile-discrete-153959719.html
October 29, 2018. AMD announced availability of two additional 2nd Gen AMD Ryzen Threadripper processor models, 2970WX with 24 cores and 48 threads and the Ryzen Threadripper 2920X with 12 cores and 24 threads. The Ryzen Threadripper WX series commands class-leading core counts, purpose-built for prosumers focused on raw computational power for the heaviest workloads. In turn, Ryzen Threadripper X series provides enthusiasts, gamers, and streamers high performance with a beautiful and smooth gaming experience based on higher base and boost processor clock speeds than the previous generation. https://finance.yahoo.com/news/amd-expands-2nd-generation-ryzen-130000717.html
Products
The company’s products include x86 microprocessors as an accelerated processing unit (APU), chipsets, discrete and integrated graphics processing units (GPUs), and professional GPUs; and server and embedded processors, and semi-custom System-on-Chip (SoC) products and technology for game consoles. It provides x86 microprocessors for desktop PCs under the AMD Ryzen, AMD Ryzen Pro, Threadripper, AMD A-Series, AMD E-Series, AMD FX CPU, AMD Athlon CPU and APU, AMD Sempron APU and CPU, and AMD Pro A-Series APU brands; microprocessors for notebook and 2-in-1s under the AMD Ryzen processors with Radeon Vega GPUs, AMD A-Series, AMD E-Series, AMD C-Series, AMD Z-Series, AMD FX APU, AMD Phenom, AMD Athlon CPU and APU, AMD Turion, and AMD Sempron APU and CPU brands; and microprocessors for servers under the AMD EPYC and AMD Opteron brands. It also offers chipsets under the AMD brand; discrete GPUs for desktop and notebook PCs under the AMD Radeon and AMD Embedded Radeon brand; professional graphic products under the AMD Radeon Pro and AMD FirePro brands; and customer-specific solutions based on AMD’s CPU, GPU, and multi-media technologies. In addition, it provides embedded processor solutions for interactive digital signage, casino gaming, and medical imaging under the AMD Opteron, AMD Athlon, AMD Sempron, AMD Geode, AMD R-Series, G-Series, and AMD Embedded Radeon brands; consumer graphics under the AMD Radeon brand; and semi-custom SoC products.
About
Advanced Micro Devices, Inc. operates as a semiconductor company worldwide. It operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom. It serves original equipment and design manufacturers, datacenters, system integrators, distributors, and add-in-board manufacturers through its direct sales force, independent distributors, and sales representatives. Advanced Micro Devices, Inc. was founded in 1969 and is headquartered in Santa Clara, California.
Analysts
Oct-30-18 Reiterated Cowen Outperform $33 → $26
Oct-25-18 Upgrade Northland Capital Market Perform → Outperform
Oct-18-18 Reiterated Cowen Outperform $30 → $33
Oct-01-18 Downgrade Robert W. Baird Outperform → Neutral
Financial review
AMD reported third-quarter 2018 non-GAAP earnings of 13 cents per share. Revenues increased 4.4% year over year to $1.65 billion.
Non-GAAP operating income increased 26% year over year to $186 million. Operating expenses on a non-GAAP basis increased 12.3% year over year to $476 million.
AMD ended the third quarter with cash and cash equivalents of $1.06 billion compared with $983 million in the previous quarter.
Total debt was $1.30 billion, down from $1.39 billion reported at the end of the previous quarter.
Guidance
For fourth-quarter 2018, AMD expects revenues to be roughly $1.45 billion.
Non-GAAP gross margin is anticipated to be 41%, driven by higher sales from Ryzen, EPYC and datacenter GPU processor sales.
Operating expenses are expected to be roughly $465 million and as percentage of revenues to be almost 32%.
For 2018, AMD expects revenues to increase mid-20% on a year-over-year basis. Non-GAAP gross margin is anticipated to be more than 37%.
Operating expenses as percentage of revenues are expected to be almost 28%.
AMD expects to generate positive free cash flow for both the fourth quarter and 2018.
Free cash flow was $62 million, much better than a free cash outflow of $88 million in the previous quarter.
Stock influences and risk factors
Intel Corporation’s dominance of the microprocessor market and its aggressive business practices may limit their ability to compete effectively.
They have a wafer supply agreement with GF with obligations to purchase all microprocessor and APU product requirements, and a certain portion of GPU product requirements from GF, with limited exceptions. If GF is not able to satisfy their manufacturing requirements, the business could be adversely impacted.
If they cannot generate sufficient revenue and operating cash flow or obtain external financing, they may face a cash shortfall.
Stock chart
On Wednesday, October 31, 2018, AMD shares were at $17.68 on traded volume of 50.1 million shares. The current RSI (14) is 28.76
At $17.68, AMD shares are trading below their 50 DMA of $26.93 and above their 200 DMA of $16.98.
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