Advanced Micro Devices AMD announced its successful migration to SAP’s SAP S/4HANA Cloud as part of its cloud strategy. This integration marks a major development with the consolidation of AMD infrastructure into a single enterprise platform.
AMD’s success is heavily attributed to the selection of RISE with SAP as a solution for scalability and flexibility across AMD’s mission-critical applications. AMD EPYC server processors have delivered strong CPU performance to large enterprises due to the collaboration with SAP.
AMD Facing Challenges Amid Stiff Competition
AMD’s shares have increased 38.8% year to date compared with the Zacks Computer and Technology sector’s rise of 19.5% in the same time frame.
The recent rise in AMD’s share price reflects a strong partner base and demand for its EPYC, Radeon and Ryzen processors. Moreover, its strategic acquisitions of Xilinx and Pensando diversified and accelerated its Data Center business.
Advanced Micro Devices, Inc. Price and Consensus
Advanced Micro Devices, Inc. price-consensus-chart | Advanced Micro Devices, Inc. Quote
However, AMD faces stiff competition in CPU, GPU, and Embedded segment from enterprises like Intel Corporation INTC and NVIDIA NVDA, hurting AMD’s product demand and growth prospects.
Shares of Intel and NVIDIA have risen 17.8% and 91.1% year-to-date, respectively.
Intel holds a significant position in the microprocessor and integrated graphics chipset markets. Its introduction of competitive products, strong relationships with top-tier OEMs, and aggressive marketing and pricing strategies affect AMD’s revenue growth and average selling prices for its products.
NVIDIA continues to capture a larger market share in the supply of discrete graphics. Intel giving access to its proprietary graphics interface to NVIDIA shall affect AMD’s gaming processors segment.
In 2023, AMD expects sluggish growth due to a weak PC market, macroeconomic challenges and stiff competition. Moreover, high cyclicality and severe downturns in the semiconductor industry may continue to dent business and operating results.
The year-over-year decline in Client and Gaming segment revenues is expected to offset growth in Data Center and Embedded segment revenues.
Sequentially, Client and Gaming segment revenues are expected to decline due to the seasonality effect. Data Center segment revenues are expected to decline due to elevated levels of inventory with some cloud customers.
This Zacks Rank #3 (Hold) company expects first-quarter 2023 revenues of $5.3 billion (+/-$300 million) indicating a year-over-year decline of 10%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for first-quarter revenues is pegged at $5.3 billion, indicating a 9.89% decline from the year-ago quarter’s reported figure.
The consensus mark for first-quarter 2023 earnings remained unchanged at 56 cents per share in the past 30 days.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
