Tech stock under pressure: Advanced Micro Devices, Inc. (NASDAQ: AMD)

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Advanced Micro Devices, Inc. (NASDAQ: AMD) stock fell over 2.5% on 29th April, 2020 (As of 11:44 am GMT-4 ; Source: Google finance) after the company admitted that the COVID-19 pandemic would reduce its growth in 2020, though posted better than expected results for the first quarter of FY 20. The company reported first-quarter net income of $162 million compared to $16 million, in the year-ago period.

AMD eased the range on its forecast for full-year revenue, now expects sales to grow in the range of 20% to 30% this year instead of 28% to 30%. The company is confident to grow despite most other companies who have rescinded annual guidance and providing quarterly forecasts only. The company has maintained its guidance for adjusted gross margin to be of 45%.

AMD in the first quarter of FY 20 has reported the adjusted earnings per share of 18 cents, which is in line with the analysts’ estimates for the adjusted earnings per share of 18 cents, according to analysts surveyed by FactSet. The company had reported the adjusted revenue of $1.79 billion in the first quarter of FY 20, beating the analysts’ estimates for revenue of $1.78 billion. The company also posted a 21% fall in enterprise embedded and semi-custom chip sales, which is the unit that includes data-center and gaming-console chips, to $348 million, while analysts had projected a 4% increase to $458.7 million. First quarter Computing and Graphics segment revenue increased 73% year-over-year to $1.44 billion, due to by increased Ryzen and Radeon processor adoption. This is with anticipations that the growth will continue at least into the second quarter on the back of the needs for work-from-home laptops and entertainment like videogames for consumers stuck at home. AMD’s other business segment, which focuses on custom work for manufacturers and its growing server business, has posted decline in revenue year-over-year, but AMD executives insisted the important Epyc data-center business has still posted growth by double-digit percentages sequentially.

Moreover, in mobile, the unit shipments increased by a strong double-digit percentage year-over-year. The company has set a record for quarterly notebook processor revenue, due to sustained demand for the previous generation offerings and the ramp of the first Ryzen mobile 4000 design wins. In graphics, first quarter unit shipments and revenue both posted growth by a double-digit percentage year-over-year, mainly due to sales of the Radeon RX 5000 series, desktop and notebook GPUs.

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