Advanced Micro Devices, Inc. (NASDAQ:AMD) stock rose 7.64% (As on February 19, 11:49:59 AM UTC-4, Source: Google Finance) after the company posted revenue that beat Wall Street targets, enthusing investors who saw the company gaining on rival Intel.  Non-GAAP gross margin was 51%, an increase of 1 percentage point year-over-year, primarily driven by a richer product mix with higher Embedded and Data Center segment revenue, partially offset by lower Client segment revenue. Non-GAAP operating income was $1.3 billion, or 23% of revenue, compared to $1.3 billion or 27% a year ago. The non-GAAP operating margin decline was primarily due to lower Client segment operating income. Net income was $21 million compared to net income of $974 million a year ago primarily due to the amortization of intangible assets associated with the Xilinx acquisition, partially offset by a $154 million tax benefit in the quarter. Cash, cash equivalents and short-term investments were $5.9 billion at the end of the quarter. The company returned $250 million to shareholders through share repurchases in the quarter. Cash from operations was $567 million in the quarter, compared to $822 million a year ago. Free cash flow was $443 million in the quarter compared to $736 million a year ago. Goodwill and acquisition-related intangible assets associated with the acquisitions of Xilinx and Pensando were $48.3 billion at the end of the quarter.

AMD in the fourth quarter of FY 22 has reported the adjusted earnings per share of 69 cents, beating the analysts’ estimates for the adjusted earnings per share of 67 cents. The company had reported the adjusted revenue growth of 16 percent to $5.6 billion in the fourth quarter of FY 22, beating the analysts’ estimates for revenue of $5.52 billion. This is primarily driven by growth across the Embedded and Data Center segments, partially offset by lower Client and Gaming segment revenue. Data Center segment revenue was $1.7 billion, up 42% year-over-year primarily driven by strong sales of EPYC server processors. Client segment revenue was $903 million, down 51% year-over-year due to reduced processor shipments resulting from a weak PC market and a significant inventory correction across the PC supply chain.

For the first quarter of 2023, AMD expects revenue to be approximately $5.3 billion, plus or minus $300 million, a decrease of approximately 10% year-over-year. Year-over-year the Client and Gaming segments are expected to decline, partially offset by Embedded and Data Center segment growth. AMD expects non-GAAP gross margin to be approximately 50% in the first quarter of 2023.