Advanced Micro Devices (NASDAQ:AMD) first-quarter results are in and they are stunning. AMD stock closed almost 2% higher after blowing past analyst estimates for its top and bottom lines by a huge margin.
The company’s revenues came in at a dazzling $5.9 billion, beating estimates by a remarkable $900 million. Analysts expected a 45% bump in revenues, but actual results came in at 71% higher than the prior-year quarter. Additionally, diluted earnings per share of $1.13 comfortably beat the 91 cents estimate for the quarter.
Furthermore, net income on a U.S. GAAP basis for the first quarter was a massive $786 million compared to the $555 million it generated last year. Moreover, gross margins grew 2% from the prior-year period. All in all, it turned out to be a record-setting quarter, excluding Xilinx.
Naturally, Chief Executive Officer Dr. Lisa Su was incredibly upbeat over AMD’s first-quarter performance. She remarked that each of the company’s businesses saw double-digit percentage improvement on a year-over-year basis. Demand remains strong for its core products and the Xilinx acquisition will continue to add value to upcoming results.
Consequently, for the full year, the tech giant expects sales to come in at roughly $26.3 billion, a 60% improvement over 2021. Moreover, it is also a healthy improvement from the prior guidance of approximately 31% due to the higher server and semi-custom sales and the Xilinx impact. Additionally, estimates for non-GAAP gross margins have also been pushed to 54% from the previous guidance of approximately 51%.
AMD stock trades at roughly 5.4 times forward sales, which is fair in comparison with its peers. In the past three months, the stock has been taking quite a hammering along with the rest of the market. The pull-back now offers an attractive entry point.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
