AMD and Qualcomm to the Moon

AMD: On the Beast Mode

Despite an initial muted response from a good set of earnings results from AMD, the stock rose sharply higher in the late trading session as the company thrived and prospered in a global chip shortage environment.

The stock snaps a two-day losing streak. CEO, Lisa, had given Wall Streets plenty of good news to celebrate. Beyond its solid earnings result is bright guidance where AMD reported an adjusted profit of 63 cents per share on $3.9 billion.

The data-centre sales were high as it gained market share from its rival, Intel, as the latter is working on improving the next generation manufacturing capability. Although AMD does not indicate its data-centre sales, some analysts predict the growth rate to be around 20% and continue to grow.

The high demand for cloud-computing CPUs and hyper-scale data centres has propelled AMD to benefit from the high demand, especially from its new version of Zen chips. However, not all analysts are rosy on the outlook. It is forecast that PC sales growth is likely to moderate in 2H2021, and any spectacular expectation is expected to have baked into the stock price.

Qualcomm-The Recovering Underdog

The mobile chipmaker has something for investors to cheer upon. Beyond its handset business, the Internet of Things (IoT) and industrial application that uses its chips are gaining traction in the market. As a result, the company is forecast to achieve a $10 billion annual revenue in this business segment.

Net income arrived at $2 billion or $1.77 a share above 74 cents from a year ago. In particular, the chip-hardware business registered a growth of 70% to hit $6.5 billion. In addition, licensing business, a lucrative arm of the company, brought in $1.5 billion, a solid recurring income base.

The company provided the fourth-quarter guidance expected to be around $2.15-$2.35 earnings per share, reflecting a continuous overwhelming demand for its chips.

The earnings season continues!