Bank of America believes that AMD will become the next Intel (in a good way) in the coming decades, surpassing the $100 billion mark as a chipmaker. Recent months have been especially kind to Team Red, with the company stocks surging by as much as 50% last month alone. A strong 1H 2020 coupled with Intel’s 7nm woes seem to have put AMD in everyone’s good books lately.
AMD posted its Q2 earnings last month, shattering records and sending shares sky-high. The overall revenue for Q2 2020 was up by 26% to $1.93 billion (from $1.53B) YoY and 8% compared to last quarter. The operating income increased from $59 million to $173 million YoY while the net income also saw a massive boost, going from $35 million to $157 million YoY. The earnings per share grew by more than 4x to $0.13 from just $0.03 in Q2 2019.
| AMD Q2 2020 Financial Results (GAAP) | |||
|---|---|---|---|
| Q2’2020 | Q2’2019 | Q1’2020 | |
| Revenue | $1.93B | $1.53B | $1.79B |
| Gross Margin | 44% | 41% | 46% |
| Operating Income | $173M | $59M | $177M |
| Net Income | $157M | $35M | $162M |
| Earnings Per Share | $0.13 | $0.03 | $0.14 |
Just a few years back, AMD shares were worth less than $10. Fast forward to the present day, and the Lisa Su led company has not only surpassed everyone’s expectations but also beaten Intel in terms of the share value.
The $100 billion target is a hefty one that may take more than a decade to achieve, but it’s certainly possible if AMD can keep up its present momentum. The company is slated to launch its 4th Gen Ryzen processors at the end of the year along with its 2nd Gen RDNA based Navi 2 GPUs. In the server segment, AMD has managed to capture a double-digit market for the first time in more than a decade and that will only improve with the 3rd Gen Milan CPUs coming later this year.
Unlike NVIDIA and Intel, AMD’s priorities are distributed across a wide range of markets. Both the next-gen Xbox Series X as well as the PS5 consoles will be based on AMD’s Zen 2 and RDNA 2 architectures. Not only that but the company’s Radeon GPUs will be debuting in the smartphone market later this year, thanks to a deal with Samsung:
