Advanced Micro Devices
AMD
recently announced the expansion of its partnership with Viettel High Tech (Member of Viettel Group) to deploy a 5G network field to serve the latter’s more than 130 million mobile customers globally.
Viettel is using AMD Xilinx Zynq UltraScale+ MPSoC devices to enable the development of its 5G networking system for mobile devices and meet the rising demand for 5G solutions globally. AMD expects the completion of Viettel’s 5G mobile network by the end of 2022.
The recent collaboration reflects how AMD is benefitting from its acquisition of Xilinx. AMD’s acquisition of Xilinx strengthened its technology portfolio and expand its rapidly growing data center business. The buyout also helped AMD address other high-growth market segments like 5G networking, gaming, communications, automotive, industrial and aerospace, high-performance computing, Artificial Intelligence (AI) and Machine Learning (ML).
As AMD looks to transition out of the slowing PC market, it is seeking to address other high-growth markets to boost top-line growth and improve margins.
AMD reported third-quarter 2022 revenues of $5.7 billion, an increase of 29% year over year.
Its results reflect lower-than-expected client segment revenues resulting from reduced processor shipments due to weaker demand in the PC market and significant inventory correction actions across the PC supply chain.
The volatile macroeconomic situation created by the high inflation, rising interest rate hikes, the Russia-Ukraine war and uncertain forex situation, has the broader tech sector in the doldrums, specifically reflected by AMD’s semiconductor peers NVIDIA and
Intel
INTC
, which also bore the brunt of the situation.
Advanced Micro Devices, Inc. Price and Consensus
Advanced Micro Devices, Inc. price-consensus-chart
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Advanced Micro Devices, Inc. Quote
In the year-to-date period AMD, NVDA and Intel’s shares have all underperformed the Zacks
Computer and Technology
sector which have fallen 48.6%, 46.7%, and 39.8%, respectively. The Zacks Computer and Technology sector declined 12.4% in the same period. AMD, currently has Zacks Rank #5 (Strong Sell).
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the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
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However, AMD’s third-quarter 2022 results also reflect solid rise in high-growth business segments like data center and gaming.
AMD Addressing Megatrends to Boost Prospects
AMD has constantly been improving the performance of its Ryzen, Xilinx and Pensando processors to help address the increasing proliferation of Artificial Intelligence (AI) and Machine Learning (ML) in industries like cloud, gaming and data center.
However, as it ventures into new markets, the company faces rising competition from the likes of Intel.
Intel is still the leading name in the consumer PC market and is the major competitor of AMD in this segment. INTC is gradually reducing its dependence on the PC-centric business by transitioning to data-centric businesses such as AI and autonomous driving.
To beat the rising competition and drive top-line growth in the coming quarters, AMD partnered with
Meta Platforms
META
to venture into the metaverse. AMD’s radio chip Xilinx Zynq UltraScale RFSoC will be utilized to develop multiple Evenstar radio units (RU) to expand 4G/5G mobile network infrastructure, which is crucial for the metaverse.
AMD’s collaboration with Meta will aid the company in expanding its semi-custom chip business, which will help to increase its foothold in high-growth markets like AI and ML.
AMD is also addressing high-performance computing (HPC) in partnership with
Hewlett Packard
HPE
and the U.S. Department of Energy’s Oak Ridge National Laboratory by building the Frontier supercomputer, which can make 1,000,000,000,000,000,000 calculations per second.
AMD’s partnership with HPE bodes well, as it helped the former to build the world’s fastest supercomputer.
AMD has taken a major space in the HPC segment as AMD powers 5 of the top 5 HPCs. This is expected to positively impact AMD’s top-line growth in the coming quarters.
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