AMD earnings face even more scrutiny after Intel’s outlook is ‘incredibly bad’

Advanced Micro Devices Inc. will show Wall Street if it “certainly” ends 2022 in a better place, after inventory clearing prices helped drive results from rival Intel Corp.


is scheduled to report earnings after the market close on Tuesday.

AMD CEO Lisa Su said three months ago that the company’s outlook, which was below Wall Street estimates at the time, included inventory liquidation costs and that the company would “Definitely escape the year in a better place.” Su also said that data center sales are “expected to increase”.

However, doubts about data center demand and excess inventory costs increased after Intel

income statement that shows that the liquidation of inventory is reducing the gross profit margin as the CPU manufacturer faces worst PC sale in recorded history. Additionally, Intel said it expected the overall data center market to decline at a “fast pace.”

Read: ‘This isn’t an earnings release, it’s a crime scene’: Analysts and social media, react to Intel’s bad quarter

Bernstein analyst Stacy Rasgon, who downgraded AMD to better performance recently, said AMD was “flawless” in his report, and that this happened before he saw the outlook “disgustingly bad” incredible” Intel couldn’t beat its already low expectations “with sales and gross margin shrinking amid a continued weakening environment and extremely large inventories.

The PC market has deteriorated significantly, Rasgon said, to the point where “his belief that AMD will demonstrate relatively better immunity to channel degradation is, unfortunately, incorrect. corpse.”

And with stuck channels, Another analyst’s forecast from nearly two years ago seems about to come true: Intel is resorting to a price waror what Rasgon calls “Intel’s recent selling of vandalism as they use both price and capacity as strategic weapons.”

“In response, we’ve seen AMD new customer parts get massive discounts at retail less than 2 months after launch (much deeper and faster than the previous generation),” said Rasgon. .

Opinion: Intel just had its worst year since the dot-com boom and it won’t get any better soon

AMD, Intel and Nvidia Corp.

have all poured new models of gaming cards into the holiday channel at a time when PC shipments are falling at the highest rate on record and a wave Used GPU or graphics processing units hit the market as unprofitable cryptocurrency mining operations dwindle.

“AMD stock should be more focused, and PC fears are high despite expectations of increased shares in servers,” Mizuho analyst Jordan Klein said in emailed comments. “My view is that buyers want AMD to drive growth that could be steady for ’23 versus the 5% downside caused by PC flush, then start slowly buying that weak guidance.”

This will be AMD’s first report since they announced the hiring of Jean Hu from Marvell Technology Inc.

as its new chief financial officer. Hu started working at AMD on January 23, successor to the retired Devinder Kumar.

Read: AMD is making history for Asian female executives


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