Advanced Micro Devices (TIKER: AMD.NASDAQ) chip manufacturing company beat Wall Street expectations on quarterly results, sending shares about 10% higher,
The company has registered first-quarter net income of $81 million, or 8 cents a share, on sales of $1.65 billion, up about 40% from $1.18 billion a year ago.
AMD expects even stronger growth in the current quarter, predicting revenue of $1.68 billion to $1.78 billion, while analysts were forecasting $1.58 billion.
AMD’s shares dropped 28% in the past year pressured by concerns that the company’s revenue gains were driven by sales of graphics processing units for crypto-mining purposes. GPUs are useful for mining younger cryptocurrencies like ether, but many believe that ether and others will soon move past the point where GPUs are cost-efficient and miners will move to other chips, such as ASICs.
Lisa Su, CEO of AMD, noted that this is the company’s third straight quarter of revenue growth, which “demonstrates their long term strategy is paying off and they are strengthening AMD with long-term investments.”
While Su admitted that crypto-related sales should decline, she believes they will continue to be a part of AMD’s sales.
“I do think the blockchain infrastructure is here to stay. I think there are numerous currencies, there are numerous applications that are using the blockchain technology,” she noted. “That being the case, we do see a bit of volatility and that’s why we are putting into our forecast for the second quarter and the second half a little bit lower blockchain demand. But that’s more than made up for by the other new products and the way the new products are ramping in the business.”
The CEO of AMD claimed that gamers are first priority for them: “Our first priority is to gamers, that’s through OEM and system integrators and key e-tailers, and we're going to continue to do that.”
By Jade Olafson