By Shariq Khan and Vibhuti Sharma
(Reuters) – Chipmaker Advanced Micro Devices (NASDAQ 🙂 Inc. posted a quarterly record growth in sales of the data center and the revenue growth forecast in fiscal 2019 above Wall Street's expectations, posted on Tuesday Actions up to 10 percent after the bell.
Investors were forged by AMD weak results after warnings from a series of other xipmakers about a slowdown in China caused by a trade dispute with the United States.
The shares of Nvidia Corp and Micron Technology Inc (NASDAQ 🙂 also rose almost 2 percent in operations after hours Intel Corp. (NASDAQ 🙂 rose marginally.
The biggest rivals Nvidia and Intel marked a stalemate growth in sales of the data center, a segment in which AMD begins to lead the chips of the server.
AMD said it expects revenues in 2019 to grow at a single digit percentage, while analysts are targeted at 6% growth.
The company stated that, despite short-term graphical winds and revenue that did not reach analyst estimates for the fourth and current quarter, it is based on its new chips of graphics and data centers to strengthen the growth of the year.
The analyst at Stifel, Kevin Cassidy, said the results of AMD were not as bad as they feared, especially compared to Nvidia.
Nvidia cut its revenue quarterly through billions of dollars on Monday due to the weak demand for its game chips in China and the sales of the data center lower than expected.
The gross margin of the fourth quarter of AMD rose to 38 percent from 34 percent of the previous year. The company said it expects tight adjusted margins to be more than 41 percent in 2019, its highest level in almost eight years.
"The more flexible gross margin prospects provide a certain level of comfort to investors," said KinNgai Chan at Summit Insights Group LLC. "AMD is well positioned to continue to gain market share from Intel in the market for high margin servers especially in 2H19."
Sales in the computing segment and AMD graphics, which includes sales of graphics chips to data centers, increased 8.5% to $ 986 million, exceeding the average estimate of # 39; analysts of 939 million dollars, according to FactSet.
AMD Executive Director Lisa Su said that there were still winds in the graphics channel, and macro uncertainty was very cautious during the first half of the year, as the forecast of revenue from the The first quarter of the company failed in forecasts for analysts.
The xipmaker expects current revenue of $ 1.25 billion, more or less than $ 50 million, a drop of 24 percent over last year. Analysts expected $ 1.47 billion, according to Refinitiv's IBES data.
He said the company expects to launch more than 30% in Ryzen's systems compared to 2018 and expects the side of the CPU to grow faster than GPU.
A shock in the prices of cryptocracies at the end of 2018 affected the chip providers including AMD in the previous quarter and caused a stack of inventories that was difficult to clean.
He told analysts about a postal revenue call that, although the levels of the first quarter inventory were rising, AMD had seen an improvement in the sale of a channel GPU throughout the entire Fourth quarter and expects the partners to reduce their inventories in the current quarter and onwards.
"My expectation is that in the second quarter we will have some kind of improved channel inventory levels and we will return to a sequential growth in the game site of our business," he told investors.
AMD's quarterly earnings of $ 1.42 billion also lost expectations of $ 1.45 billion. Without including elements, AMD obtains a profit of 8 cents per share, based on analyst estimates.