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What Impacted Advanced Micro Devices Stock in May 2017?

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AMD stock fell 16% in May 2017

Semiconductor (SMH) company Advanced Micro Devices (AMD) stock fell almost 16% in May 2017 to close at $11.19 on May 31, 2017. On May 1, AMD announced its 1Q17 results and reported revenues of $984 million, a rise of 18% YoY (year-over-year).

AMD’s non-GAAP[1. generally accepted accounting principles] net loss fell from $0.12 per share in 1Q16 to $0.04 per share in 1Q17. Although AMD met analyst revenue estimates in 1Q17, its stock fell 24% on May 1, 2017, as investors seemed wary about its revenue growth in fiscal 2017. AMD stock has already risen almost 300% in the trailing 12-month period.

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What could impact AMD stock in 2017?

Advanced Micro Devices (AMD) expects its Computing and Graphics (or CG) segment to drive sales in fiscal 2017 and fiscal 2018. AMD plans to launch competitive products at lower prices in its CG segment. 

Revenues from the CG segment rose 29% YoY to $593 million in 1Q17. The CG segment accounted for 60% of AMD’s total revenues and reported double-digit growth for the fourth consecutive quarter.

Strong demand for personal computer CPUs[2. central processing units] and GPUs[3. graphics processing units] are key drivers for AMD’s Computing and Graphics segment. Market research reports suggest that PC sales are expected to rise YoY in fiscal 2017 after a decline over the last two years.

AMD’s revenues for its CG segment fell 1% quarter-over-quarter. Among its peers, Nvidia (NVDA) and Intel’s (INTC) CG business segment revenues fell 24% and 12% quarter-over-quarter, respectively, in 1Q17.

AMD performed better than its peers in 1Q17 as strong Ryzen CPU sales largely offset weak GPU and notebook APU[4. application processing unit] sales. Ryzen’s higher ASP (average selling price) helped AMD improve its CG operating income from -$21 million in 4Q16 to -$15 million in 1Q17.

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