{"id":400695,"date":"2022-01-29T02:51:00","date_gmt":"2022-01-28T23:51:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/earnings-outlook-amd-is-about-to-wander-into-a-minefield\/"},"modified":"2022-01-29T02:51:00","modified_gmt":"2022-01-28T23:51:00","slug":"earnings-outlook-amd-is-about-to-wander-into-a-minefield","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/earnings-outlook-amd-is-about-to-wander-into-a-minefield\/","title":{"rendered":"#Earnings Outlook: AMD is about to wander into a minefield"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a37355bb8ee4\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a37355bb8ee4\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/earnings-outlook-amd-is-about-to-wander-into-a-minefield\/#AMD_earnings_preview_As_other_chip-related_companies_are_punished_for_weaker-than-expected_forecasts_analyst_says_AMD_still_%E2%80%98has_the_capacity_to_deliver_upside\" >AMD earnings preview: As other chip-related companies are punished for weaker-than-expected forecasts, analyst says AMD still \u2018has the capacity to deliver upside\u2019<\/a><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><ul class='ez-toc-list-level-6' ><li class='ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/earnings-outlook-amd-is-about-to-wander-into-a-minefield\/#What_to_expect\" >What to expect<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-6'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/earnings-outlook-amd-is-about-to-wander-into-a-minefield\/#What_analysts_are_saying\" >What analysts are saying<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/earnings-outlook-amd-is-about-to-wander-into-a-minefield\/#Wallace_Witkowski\" >Wallace Witkowski<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong>#Earnings Outlook: AMD is about to wander into a minefield<\/strong>&#8221;<\/p>\n<h2 class=\"article__subhead\" itemprop=\"alternativeHeadline\"><span class=\"ez-toc-section\" id=\"AMD_earnings_preview_As_other_chip-related_companies_are_punished_for_weaker-than-expected_forecasts_analyst_says_AMD_still_%E2%80%98has_the_capacity_to_deliver_upside\"><\/span>\n  AMD earnings preview: As other chip-related companies are punished for weaker-than-expected forecasts, analyst says AMD still \u2018has the capacity to deliver upside\u2019<br \/>\n<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><\/p>\n<div class=\"column column--full article__content\" role=\"region\" aria-label=\"article body\">\n<div class=\"article__side\">\n<div class=\"container--sticky not-active\">\n<div id=\"cx-next\" data-nosnippet>\n              <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"js-article__body\" class=\"article__body article-wrap at16-col16 barrons-article-wrap\" itemprop=\"articleBody\" data-sbid=\"WP-MKTW-0000576484\" role=\"document\">\n<div class=\"barrons-article-ad-wrapper\">\n<div data-track=\"barrons-article-ad-wrap\" class=\"barrons-article-ad sticky_item\">\n<div class=\"barrons-main-article-ad-target sticky_target body_ad\" aria-hidden=\"true\"><\/div>\n<\/p><\/div>\n<\/p><\/div>\n<div data-layout=\"\n                inline\" data-layout-mobile=\"\" class=\"\n          media-object\n          type-InsetArticleReader\n              \n              inline\n  article__inset\n          article__inset--type-InsetArticleReader\n              article__inset--inline\n  \"><\/p>\n<div class=\"media-object-article-reader\">\n<div class=\"audioplayer\" data-sbid=\"WP-MKTW-0000576484\" role=\"region\" aria-label=\"Listen to Article\" tabindex=\"-1\" id=\"articlereader\" data-show-title=\"false\" data-theme=\"wsj-article-reader\" data-show-header=\"false\" data-show-subscribe=\"false\" data-ads-enabled=\"true\" data-save-publication=\"false\">\n        <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>       Advanced Micro Devices Inc. earnings will serve as an important indicator on whether the semiconductor outlook is truly weak in early 2022, or whether it\u2019s just weak for certain companies.<\/p>\n<p> AMD<br \/>\n        AMD,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/208144392\/composite\" class=\"positive\">+2.57%<\/bg-quote><br \/>\n       is scheduled to report earnings after the bell on Tuesday, as the PHLX Semiconductor Index<br \/>\n        SOX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598361\/realtime\" class=\"positive\">+1.83%<\/bg-quote><br \/>\n       teeters on the brink of a bear market. Chip stocks have struggled of late as a majority of the chip and chip-related companies reporting earnings so far have presented weak outlooks for the current quarter. <\/p>\n<div class=\"paywall\">\n       Intel Corp.<br \/>\n        INTC,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/203649727\/composite\" class=\"negative\">-0.67%<\/bg-quote><span>,<\/span><br \/>\n       Lam Research Corp.<br \/>\n        LRCX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/208077897\/composite\" class=\"positive\">+1.05%<\/bg-quote><span>,<\/span><br \/>\n       KLA Corp.<br \/>\n        KLAC,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/209248041\/composite\" class=\"positive\">+1.34%<\/bg-quote><span>,<\/span><br \/>\n       and Western Digital Corp.<br \/>\n        WDC,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/204213617\/composite\" class=\"negative\">-7.32%<\/bg-quote><br \/>\n       all reported forecasts that fell short of Wall Street expectations in some way, with Texas Instruments Inc.<br \/>\n        TXN,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/202237907\/composite\" class=\"positive\">+2.09%<\/bg-quote><br \/>\n       being the only company to forecast a better-than-expected outlook. Cowen analyst Matthew Ramsay expects AMD to join TI, with solid results as well as another round of aggressive forecasts.<\/p>\n<p>\u201cEven after raising guidance multiple times through 2021 from 37% to 50% to 60% to now 65%, we believe AMD has the capacity to deliver upside, which would have been higher with better supply,\u201d Ramsay, who has an outperform rating and a $150 price target on AMD, wrote. <\/p>\n<p><strong>Read:\u00a0<\/strong>Chip sector flirting with bear-market territory as semiconductor earnings kick off<\/p>\n<p>\u201cWe expect management to set an aggressive, but achievable outlook for 2022 that demonstrates continued PC and server share gains (including enterprise in both), while still leaving room to raise numbers through the year as supply improves further,\u201d the Cowen analyst wrote.<\/p>\n<p>AMD\u2019s previous quarter was so strong that analysts had trouble nitpicking results three months ago. One milestone to watch is if AMD\u2019s profit margins meet or exceed the 50% threshold, which has become even more significant as Intel executives seek to keep their margins \u201ccomfortably above 50%,\u201d or in the 52% to 53% range for the year. AMD reported margins of 48% in the third quarter, up from 44% in the year ago period, but unchanged from 48% in the second quarter.<\/p>\n<p><a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> on a big deal closing would also be welcomed by investors. With Nvidia Corp.\u2019s<br \/>\n        NVDA,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/200467500\/composite\" class=\"positive\">+4.08%<\/bg-quote><br \/>\n       deal to acquire Arm Ltd. reportedly falling apart, that makes AMD\u2019s conditional regulatory <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>roval from Chinese regulators for its $35 billion deal to acquire Xilinx Inc.<br \/>\n        XLNX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/209389378\/composite\" class=\"positive\">+2.61%<\/bg-quote><br \/>\n       even more significant. AMD disclosed late last year that it expects the deal to close this quarter.<\/p>\n<p>Earlier in the year at CES, AMD announced a slew of new products including a $200 graphics card.<\/p>\n<h6><span class=\"ez-toc-section\" id=\"What_to_expect\"><\/span>What to expect<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p><strong>Earnings:<\/strong>\u00a0AMD on average is expected to post adjusted earnings of 75 cents a share, up from 52 cents a share reported in the year-ago period, according to a FactSet survey of 32 analysts. Estimize, a software platform that crowdsources estimates from hedge-fund executives, brokerages, buy-side analysts and others, calls for earnings of 80 cents a share.<\/p>\n<div id=\"cx-membership-tile\"><\/div>\n<p><strong>Revenue:<\/strong>\u00a0AMD, on average, is expected to post revenue of $4.47 billion, according to FactSet, up from the $3.24 billion reported in the year-ago quarter. AMD had forecast $4.4 billion to $4.6 billion. Estimize expects revenue of $4.61 billion.<\/p>\n<p><strong>Stock movement:<\/strong>\u00a0While AMD earnings and sales have both topped Wall Street estimates over the past six quarterly reports, shares only gained the next day twice in that time \u2014 about\u00a0six months ago\u00a0and\u00a0when the stock popped nearly 13%\u00a0six quarters ago.<\/p>\n<p>AMD shares are firmly in bear market territory, down 35% off their closing high of $161.91 set on Nov. 29, but have still gained 20% over the past 12 months. In comparison, the SOX index is up nearly 13% in that time, the S&amp;P 500 index<br \/>\n        SPX,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210599714\/realtime\" class=\"positive\">+2.43%<\/bg-quote><br \/>\n       has gained 17%, and the tech-heavy Nasdaq Composite Index<br \/>\n        COMP,<br \/>\n        <bg-quote field=\"percentchange\" format=\"0,000.00%\" channel=\"\/zigman2\/quotes\/210598365\/realtime\" class=\"positive\">+3.13%<\/bg-quote><br \/>\n       has been whittled down to a 3.3% gain.<\/p>\n<p>Over the fourth quarter, AMD shares fell 27%, as the SOX index rose 21%, the S&amp;P 500 index\u00a0rose nearly 11%, and Nasdaq gained 8%. <\/p>\n<h6><span class=\"ez-toc-section\" id=\"What_analysts_are_saying\"><\/span>What analysts are saying<span class=\"ez-toc-section-end\"><\/span><\/h6>\n<p>Bernstein analyst Stacy Rasgon, who has a market perform rating and a $130 price target, said AMD\u2019s execution remains strong.<\/p>\n<p>\u201cShare position continues to improve especially in notebook and server,\u201d Rasgon said. \u201cThe company\u2019s full-year guidance implies Q4 gross margins reaching within spitting distance of 50%, and Street estimates going forward appear fairly unaggressive (and at levels below long term targets.\u201d<\/p>\n<p>\u201cAnd the company is now starting to return fairly material amounts of cash,\u201d Rasgon continued. \u201cWhile PCs will do what they will, we do believe AMD is capitalizing well as Intel enters transition, and seems better positioned than their larger counterpart (and at a minimum our negative Intel call should be increasingly fueled the better AMD does).\u201d<\/p>\n<p><strong>Read:\u00a0<\/strong>Chips may be sold out for 2022 thanks to shortage, but investors are worried about the end of the party<\/p>\n<p>That PC concern was the cause of Piper Sandler analyst Harsh Kumar downgrading AMD to neutral earlier in the month. The cooling comes after two big back-to-back years for PC sales, which reached shipment levels not seen in a decade because of COVID.<\/p>\n<p>Susquehanna Financial analyst Christopher Rolland, who has a positive rating on AMD, said the chip maker\u2019s \u201cserver road map continues to march forward.\u201d<\/p>\n<p>\u201cAMD plans to release 3-D VCache \u201cMilan-X\u201d in 1H22, followed by Zen 4 Genoa by year-end,\u201d Rolland said. \u201cWhile Genoa could also be experiencing similar DDR5 validation issues as Intel\u2019s {Sapphire Rapids], we have not come across rumors of delay for AMD\u2019s servers.\u201d<\/p>\n<p>Jefferies analyst Mark Lipacis, who has a buy rating and a $145 price target, notes how much AMD is growing their share of the CPU market while Intel\u2019s declines. <\/p>\n<p>\u201cIntel\u2019s share declined by 150bps to 78.9% from 80.4% in Oct-21 as AMD\u2019s share rose by 240bps to 14.5% from 12.1%,\u201d Lipacis said.<\/p>\n<p>Overall, 22 of the 40 analysts covering AMD who are tracked by FactSet rate shares the equivalent of a \u201cbuy,\u201d 17 call it a hold and just one calls the stock a \u201csell.\u201d The average price target as of Friday afternoon was $145.91, representing a 38.6% premium to the going rate. <\/p><\/div>\n<\/div><\/div>\n<p><\/p>\n<div class=\"byline article__byline\">\n<p>    <span>By<\/span><\/p>\n<div class=\"author mobile-scrim hasMenu\" data-scrim='{\"type\":\"author\",\"header\":\"Wallace Witkowski\",\"subhead\":\"The Wall Street Journal\",\"list\":[{\"type\":\"link\",\"icon\":\"bio\",\"url\":\"https:\/\/www.marketwatch.com\/topics\/journalists\/wallace-witkowski\",\"text\":\"Biography\"},{\"type\":\"link\",\"icon\":\"twitter\",\"url\":\"https:\/\/twitter.com\/wmwitkowski\",\"text\":\"@wmwitkowski\"},{\"type\":\"link\",\"icon\":\"email\",\"url\":\"http:\/\/www.marketwatch.com\/news\/mailto:wwitkowski@marketwatch.com\",\"text\":\"wwitkowski@marketwatch.com\"}]}' itemscope itemprop=\"author\" itemtype=\"http:\/\/schema.org\/Person\">\n<h4 itemprop=\"name\"><span class=\"ez-toc-section\" id=\"Wallace_Witkowski\"><\/span>Wallace Witkowski<span class=\"ez-toc-section-end\"><\/span><\/h4>\n<\/p><\/div>\n<\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. 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