AMD announces revenue forecast for this year, better than Wall Street expectations

  AMD released its latest earnings report on January 30. The quarterly growth rate of data center revenues reached a record, and the estimated growth rate of revenue in 2019 was higher than Wall Street's expectation, and the stock price after-hours trading rose 10%.

According to Reuters, many semiconductor manufacturers said that they were affected by Sino-US trade relations. The development in China was not as good as expected. Even the investors did not have much hope for AMD's financial results.

AMD's quarterly revenue was $1.42 billion, lower than the expected $1.45 billion. However, Kevin Cassidy, an analyst at Stifel Financial, said that AMD’s earnings were not as bad as expected compared to Nvidia. Due to weak demand for gaming chips in China and lower-than-expected data center revenues, NVIDIA significantly revised its fourth-quarter revenue on Monday, with an estimated $500 million reduction.

AMD is relying on server chips to gain a foothold in the data center, but rivals NVIDIA and Intel's revenues in this area have stagnated.

AMD's gross margin in the fourth quarter rose from 34% to 38%, and its gross margin is expected to exceed 41% in 2019, the highest in nearly eight years. At the same time, it is estimated that revenue in 2019 will have a high single-digit growth rate, which is better than Wall Street expectations.

KinNgai Chan, an analyst at financial consulting firm Summit Insights, believes that AMD will continue to divide Intel's market share in the server market, especially in the second half of 2019.

AMD CEO Su Zifeng said that due to lower-than-expected revenue forecasts in the first quarter, there are still many uncertainties in the first half of this year. However, AMD is expected to launch a 30% more Radon processor than in 2018, while CPU growth will be faster than GPU growth.

At the end of 2018, the price of cryptocurrency plummeted, causing semiconductor manufacturers including AMD to be seriously injured and making it difficult to empty inventory. However, Su Zifeng told analysts that although the inventory is high, but GPU sales are still progressing, so I believe that this quarter can reduce inventory. At the same time, she expects AMD's game-related business to continue to grow in the second quarter.