(Bloomberg) — Advanced Micro Devices Inc. gave a bullish third-quarter sales forecast, indicating it’s gaining market share from Intel Corp. in the lucrative market for server chips.
AMD, the second-largest maker of computer processors behind Intel, predicted third-quarter revenue will be about $4.1 billion, plus or minus $100 million. On average, analysts had projected revenue of $3.8 billion. The company also raised its annual outlook and now expects revenue to increase by 60% up from a previous forecast for 50% growth.
Chief Executive Officer Lisa Su has brought the company back from the brink of irrelevance with a raft of new products that customers see as competitive with Intel’s offerings for the first time in years. Investors have poured money into AMD’s stock over the last five years, expecting Su’s changes to result in higher market share and earnings. So far this year, however, the stock has slid about 2%, compared with the Philadelphia Stock Exchange Semiconductor Index’s 13% gain, as the market looks for evidence of sustained progress.
“We are growing significantly faster than the market with strong demand across all of our businesses,” Su said in a statement.
AMD’s earnings report Tuesday indicates the company is taking market share at Intel’s expense. Intel, the world’s largest superconductor manufacturer, reported a 6% decline in second-quarter revenue. AMD also competes with Nvidia Corp. in the market for graphics processors used in cards for gaming personal computers.
Su said the company can continue to grow, even if PC demand falls in 2022. “We expect our competition to be really good and we need to be better than that,” Su said during a conference call after the results.
In the second quarter, profit more than tripled to $710 million, or 58 cents a share, Santa Clara, California-based AMD said. Revenue rose 99% to $3.8 billion.
AMD shares rose less than 1% in extended trading after closing at $91.03 in New York.
(Updates with comments from CEO in the sixth paragraph.)
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