Advanced Micro Devices, Inc. (NASDAQ: AMD)
Advanced Micro Devices is having a great day in the market today, and for a very good reason. Recently, the company reported earnings well ahead of expectations. However, that’s not the big story. The big story surrounds intellectual property. Today, we’ll talk about what we saw from earnings, what’s going on with IP, how the market is reacting to the news, and what we can expect to see from AMD moving forward. So, let’s get right to it…
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AMD Reports Strong Earnings
As mentioned above, Advanced Micro Devices reported its earnings for the first quarter after the closing bell yesterday. The report was overwhelmingly positive. Here’s what we saw:
- Top-Line Revenue – In terms of revenue, AMD did incredibly well. During the first quarter, analysts expected that the company would produce revenue in the amount of $818.16 million. However, the company blew away these expectations, producing a total of $832 million in top-line revenue.
- Earnings Per Share – In terms of earnings per share, the company also did incredibly well. In the first quarter, analysts expected that AMD would generate earnings in the amount of $0.01 per share. However, the company actually reported earnings at $0.12 per share.
As you can see from the data above, the earnings report went overwhelmingly well. In a statement, Lisa Su, CEO at Advanced Micro Devices, had the following to say:
“We continued to strengthen the performance of our Computing and Graphics business as our customers and partners show a growing preference for AMD. We are optimistic about our growth prospects in the second half of the year across our businesses based on new product introductions and design wins.”
Strong Earnings Wasn’t The Only Positive News
While earnings are generally enough to excite investors, strong earnings aren’t the only positive news we received from AMD last night. In fact, there was something announced with regard to IP that really got investors moving. Advanced Micro Devices announced that it had signed a new IP licensing agreement and joint venture with Tianjin Haiguang Advanced Technology Investment, also known as THATIC. According to the agreement, THATIC will soon develop state-of-the-art chipsets and processors for the Chinese server market. These chipsets will compliment recently launched products from AMD and create competition for Intel. Ultimately, in the long run, this will drive incredibly strong revenue for AMD.
How The Market Is Reacting To The News
As investors, we know that the news moves the market. Any time there is positive news released with regard to a publicly-traded company, we can expect to see gains in the value of the stock associated with that company. Following an overwhelmingly strong earnings report and news of an IP agreement that will likely lend a hand to big revenue growth in the long run, we’re seeing strong gains in the value of AMD as a result of the good news. Currently (9:41), AMD is trading at $3.25 per share after a gain of $0.63 per share or 24.05% thus far today.
What We Can Expect To See Moving Forward
Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from AMD. While the company has fallen on some hard times recently, it seems to me as though they have definitely cleared the hurdle at this point. As Advanced Micro Devices continues to see strong revenue and earnings, in combination with the IP agreement and the revenue that will bring, I believe that the stock is going to continue to climb.
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What Do You Think?
Where do you think AMD is headed moving forward and why? Let us know your opinion in the comments below!
[Image Courtesy of Wikimedia]