Please ensure Javascript is enabled for purposes of website accessibility

Why AMD Stock Gained This Morning

By Evan Niu, CFA - Apr 28, 2021 at 12:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The chipmaker reported first-quarter results and issued strong guidance for the second quarter.

What happened

Shares of Advanced Micro Devices (AMD 2.76%) gained as much as 5% this morning after the company reported first-quarter earnings results. As of 11:50 a.m. EDT, the stock had given back those gains and was down less than 1%.

So what

Revenue in the first quarter soared by 93% to $3.4 billion, which was ahead of the $3.2 billion in sales that analysts were expecting. That resulted in adjusted earnings per share of $0.52, also topping Wall Street's forecast of $0.44 per share in adjusted profits. The semiconductor company has been expectedly impacted by the global chip shortage that has constrained many industries.

AMD Ryzen chip

Image source: AMD.

"Our business continued to accelerate in the first quarter driven by the best product portfolio in our history, strong execution, and robust market demand," CEO Dr. Lisa Su said in a statement. "We had outstanding year-over-year revenue growth across all of our businesses and data center revenue more than doubled."

Now what

Supply constraints have been slowly easing as foundry partners expand production capacity, and Su noted on the conference call with analysts that AMD is working closely with its supply chain partners to ensure visibility throughout the rest of the year. Earlier this month, AMD and Xilinx shareholders approved the acquisition that was announced last year, paving the way for that transaction to close by year's end.

Guidance for the second quarter calls for revenue of $3.5 billion to $3.7 billion, well above the consensus estimate of $3.3 billion in sales. That should result in adjusted gross margin of approximately 47%.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Xilinx. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Advanced Micro Devices, Inc. Stock Quote
Advanced Micro Devices, Inc.
AMD
$100.83 (2.76%) $2.71
Xilinx, Inc. Stock Quote
Xilinx, Inc.
XLNX

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/15/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.