Advanced Micro Devices Inc (NASDAQ:AMD) swung to a profit in its second-quarter results, reporting strong gains in revenue as demand jumps for its processors and graphic chips.
The chipmaker posted earnings of US$0.11 per share on revenue of US$1.76bn, compared with a loss of US$0.04 on revenue of US$1.15bn in the previous year’s second quarter.
The tech company reported adjusted earnings of US$0.014, beating analyst estimates of US$0.12 per share. Revenue came in ahead of the US$1.72bn estimates.
For the third quarter, the company expects revenue between US$1.65bn and US$1.75bn, slightly below analyst expectations of US$1.76bn.
Sales in its graphics and computing business jumped 64% to US$1.09bn due to increased demand for its desktop processors and graphic cards.
However, sales in that segment fell by 3% quarter-over-quarter.
The rise of cryptocurrency fueled the demand for its graphics cards, used for crypto mining. As fears of regulatory crackdown sent crypto prices downward, fewer miners were purchasing them.
Graphics cards used by cryptocurrency miners accounted for about 6% of overall sales compared with 10% in the previous second quarter.
Shares of the chip company were up nearly 9% to US$17.45 in Thursday morning trading.
Analysts chipper on AMD
Baird analysts were heartened by the company’s continued improvement in fundamentals and its gains in market share.
The dip in demand for graphics cards, or GPUs, didn’t appear to have any bearing on its rating.
“Our estimates remain relatively unchanged as ongoing and temporary GPU revenue headwinds are offset by the ramp of Ryzen and EPYC,” wrote analyst Tristan Gerra. The analyst reiterated an Outperform rating with a price target of US$20.
JPMorgan analysts took note of the drop in demand for GPUs but shifted focus to the company’s year-over-year growth. Analyst Harlan Sur maintained a Neutral rating but raised the price target to US$15.50 from US$13.